July 16 - Strong performance in investment banking helped Goldman Sachs more than double its quarterly earnings. Fred Katayama reports.
Goldman Sachs' huge jump in investment banking revenue reflects the recovery in the U.S. economy. It helped more than double the securities firm's second quarter earnings to $1.9 billion dollars and smash Wall Street's estimates for profit and revenues. Goldman's strength - its fixed income, currency and commodities business - faced a challenging period as interest rates rose. But strength in currencies and commodities helped boost those revenues 12 percent. And the bank made a lot more money off its own investments, with revenues jumping seven-fold. UBS analyst Brennan Hawken said: "Goldman continues to run a strong franchise, and we believe cost flexibility reduces downside for shareholders. However, we believe these positives are reflected in Goldman Sachs shares at current levels." Goldman's stock is up 28 percent this year. But it's still 34 percent below its peak in 2007. The major banks have been beating the Street with double digit profit gains so far. Goldman's archrival, Morgan Stanley, reports on Thursday.