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Citigroup Profit News Lifts Battered Market

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By SARA LEPRO and TIM PARADIS

The Associated Press

Published: March 10, 2009

NEW YORK - Wall Street has had its best day of 2009, storming higher on good news from Citigroup.

Citigroup Inc. says it operated at a profit during the first two months of the year. That energized financial stocks and, in turn, the entire market. Surprised investors drove the major indexes up more than 5.5 percent, the biggest one-day rally of the year. The Dow Jones industrials shot up nearly 380 points.

Many analysts remain cautious, noting that Wall Street has seen many blips higher since the credit crisis and recession began. Word of Citi's performance broke a monthslong torrent of bad news from the banking industry, but analysts weren't ready to say the stock market was at a turning point and about to barrel higher after a slide that has lasted more than 16 months.

"To have a sustained rally, we have to have a shift in sentiment," said Kurt Karl, an economist with Swiss Re. "One day isn't going to make a trend."

In a letter to employees Monday, Citi Chief Executive Officer Vikram Pandit said the performance this year has been the bank's best since the third quarter of 2007, the last time it booked a profit for a full quarter. Based on historical revenue and expense rates, Citi's projected earnings before taxes and one-time charges would be about $8.3 billion for the full quarter.

Citi surged 38 percent, and Bank of America Corp. rose 27.7 percent.

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