Stocks continue retreat on Goldman worries; China moves to further restrict lending

Stocks pullback at open on Goldman worries

NEW YORK — Stocks are falling on concerns about the fallout over Goldman Sachs being charged with civil fraud tied to its dealings in bonds backed by subprime mortgages.

Asian markets are tumbling Monday in their first trading session since the Securities and Exchange Commission brought civil fraud charges Friday against Goldman Sachs Group Inc. World markets are also being dragged down by new measures in China to curb speculative real estate investing.

More upbeat earnings, led by better-than-expected profit at Citigroup Inc., are somewhat helping to offset the Goldman concerns.

In early morning trading, the Dow Jones industrial average is down 18.13, or 0.2 percent, at 11,000.53. The Standard & Poor’s 500 index is down 2.86, or 0.2 percent, at 1,189.27, while the Nasdaq composite index is down 7.30, or 0.3 percent, at 2,473.96.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

NEW YORK (AP) — Stock futures fell Monday on concerns about the fallout over Goldman Sachs being charged with civil fraud tied to its dealings in bonds backed by subprime mortgages.

Asian markets tumbled in their first trading session since the Securities and Exchange Commission brought civil fraud charges Friday against Goldman Sachs Group Inc. World markets are also being dragged down by new measures in China to curb speculative real estate investing.

China said over the weekend it would take more steps to level off real estate prices, which have been rising sharply for months. The government is concerned about speculative bubbles forming and bursting as its economy continues to grow rapidly.

New restrictions might include clamping down on lending to buyers who already own two or more homes. In recent months, China has increased the minimum amount of money banks must hold to slow down lending.

In the U.S., investors are concerned about potential long-term repercussions tied to the charges against Goldman. The civil suit comes just as Congress is taking up a bill to overhaul regulating the financial sector, including risky securities like those at the center of the Goldman case.

Financial stocks could continue to struggle in the coming days because of uncertainty about new potential regulations in light of the Goldman charges and whether the SEC might investigate other banks that traded similar securities.

Corporate earnings might eventually siphon some attention away from Goldman throughout the week, but Citigroup Inc.’s better-than-expected profit Monday did little to sway traders.

Citigroup, among the hardest hit by the credit crisis, followed JPMorgan Chase & Co. and Bank of America Corp., said its profit improved because of strong investment banking operations. Citi also said its losses from failed loans fell slightly from the previous quarter, but executives remain cautious about a recovery.

Other big companies will report throughout the week, including International Business Machines Corp., Coca-Cola Co. and Apple Inc. Goldman Sachs reports first-quarter results Tuesday.

Ahead of the opening bell, Dow Jones industrial average futures fell 49, or 0.5 percent, to 10,935. Standard & Poor’s 500 index futures fell 6.20, or 0.5 percent, to 1,184.10, while Nasdaq 100 index futures fell 5.50, or 0.3 percent, to 2,004.25.

Citigroup shares jumped 17 cents, or 3.7 percent, to $4.73 in premarket trading. Goldman shares fell $1.70 to $159.00 after tumbling 12.8 percent Friday.

Stocks plummeted Friday after the SEC announced the charges against Goldman. The Dow lost about 125 points, but was down as much as 170 points during the trading session. It briefly fell back below 11,000 during trading. It closed above 11,000 last week for the first time in 18 months.

Meanwhile, bond prices were little changed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged at 3.77 percent compared with late Friday.

The dollar rose against other major currencies. Gold and oil both fell.

Overseas, Hong Kong’s Hang Seng fell 2.1 percent and Japan’s Nikkei stock average tumbled 1.7 percent. Britain’s FTSE 100 was dropped 0.7 percent, Germany’s DAX index fell 0.5 percent, and France’s CAC-40 fell 0.8 percent.