Page last updated at 15:17 GMT, Tuesday, 16 December 2008

Goldman Sachs reports huge loss

File with Goldman Sachs written along spine
Goldman has managed to stay independent and solvent

Goldman Sachs has reported a $2.12bn (1.41bn) quarterly loss, its first since going public in 1999.

The US banking giant's loss for the three months to the end of November was still smaller than had been expected and its shares rose 4% in New York.

During the same period in 2007, Goldman Sachs reported net income of $3.22bn.

Goldman Sachs and rival Morgan Stanley are the only two of Wall Street's original five investment banks still in independent existence.

In September, they changed their status to become bank holding companies, allowing them to take deposits from investors.

Difficult year

"The fear in the market was, the results would be much worse than they were. So the stock is rallying," said Walter Todd, portfolio manager at Greenwood Capital Associates.

"I think going forward, what kind of business does Goldman Sachs have? There's a huge question mark at this point," said Robert Lutts, at Cabot Money Management.

This year has been a difficult one for US financial institutions, as they suffered billion-dollar losses and had to cut jobs, while some of them were taken over by the government or rivals.

Seeking to stabilise the financial system, the US government has bailed out Citigroup, Bear Stearns, Fannie Mae, Freddie Mac and American International Group and injected hundreds of billions of dollars into the financial system.

Another of Goldman's rivals, Lehman Brothers, went bankrupt in September.

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