Markets close on gains, following earnings reports

UPDATED:

Wall Street posted small gains Friday following better-than-expected reports on first-quarter earnings by Citigroup Inc., Google Inc., and General Electric Co.

The Dow Jones Industrial Average closed at 8,131.33, up 5.90 points. The broader Standard & Poor’s 500-stock Index closed at 869.56, up 4.26 points, and the tech-heavy NASDAQ closed 2.63 points up, to 1,663.74.

Citigroup shares were down 7.98 percent, to $3.69. Google shares were up 0.88 percent, to $392.16, and General Electric shares were up 1.22 percent, to $12.42.

Citigroup reported its best quarter earnings since 2007. The New York-based bank reported first-quarter 2009 revenues of $24.8 billion and a net income of $1.59 billion but its stock price fell 18 cents a share.

The company also reported a 10-percent decline in credit-card revenue and that it has cut roughly 13,000 jobs since the fourth quarter of 2008 — to 309,000 — and roughly 65,000 since peak levels.

Analysts polled by the Thomson Reuters market intelligence company had expected a loss of 34 cents a share and revenue of $22.9 billion.

General Electric reported a first-quarter net income of $2.9 billion with stocks up 26 cents a share, compared to analysts’ predictions of as low as 17 cents a share. The company also reported a 35-percent decrease in earnings on slumping sales and losses from GE Capital, the company’s lending division.

Google reported revenues of $5.51 billion for the quarter, an increase of 6 percent compared to the first quarter of 2008 and a decrease of 3 percent compared to the fourth quarter of 2008.

Google said the revenue figure did not include $1.44 billion in deductions for traffic acquisition costs, which equaled about 27 percent of revenue. Traffic acquisition costs is money spent to buy key words that Web users might try when looking for information on Google and other search-engine sites.

Investors are trying to build on Wall Street’s five-week rally: on optimism the U.S. economy has hit bottom and that first-quarter reports will validate that optimism. In addition to the Citigroup report, three other major U.S. banks over the past eight days have released first-quarter reports that also have exceeded expectations.

JPMorgan Chase & Co., the second-largest U.S. bank by assets, on Thursday reported earnings of $2.14 billion — better than expected but 10 percent less than the $2.37 billion in earnings a year earlier. The Wall Street-based investment bank Goldman Sachs Group Inc. on Monday reported $1.81 billion in profits. And Wells Fargo last week forecasted a record $3 billion profit for the first quarter.

Another round of reports are scheduled for release next week, including those from Bank of America Corp. and Morgan Stanley.