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Bank of America and Goldman Sachs miss the mark
Despite better earnings by Citigroup and JPMorgan Chase, two of the other largest banks failed to meet expectations. Goldman Sachs' (NYSE: GS) net income soared 77% to $1.09 billion, from $613 million for the same period last year, but still fell short of the $2.03 per share estimated by analysts. The reason was trading revenue fell by 47%, this being the main business for the bank. In addition to the losses reported, the company announced it would be cutting 1,000 jobs as a $1.2 billion cost-cutting measure.

Bank of America (NYSE: BAC), on the other hand, posted an $8.8 billion second-quarter loss, its worst ever. The main loss came from the repurchase of toxic home loans held in mortgage-backed securities, after an agreement with private investors. Excluding this one-time charge, the bank earned $3.7 billion. According to analysts, the bank will not be able to raise its dividend anytime soon. It currently pays $0.01 per share quarterly. Read more at Bloomberg and Reuters.

Wells Fargo rises up
San Francisco-based Wells Fargo (NYSE: WFC) emerged from the financial crisis as one of the strongest banks in the nation. For the second quarter, the consumer bank reported earnings of $3.9 billion, or $0.70 per share, beating analyst expectations. The increase came from a reversal of $1 billion set aside to offset loan losses. This helped buffer a 5% decrease in revenue.

The bank's investment branch was not as affected as its larger competitors, helping it contain losses despite loan losses. The bank, which holds one of the largest real estate portfolios after acquiring Wachovia, has set aside another $242 million to buy back loans from troubled securities sold to Fannie Mae and Freddie Mac. Read more at The New York Times.

IBM and Coke earnings boost stocks
The market opened with a rally after encouraging earnings releases. The Dow Jones Industrial Average was up 1.4%, led by IBM (NYSE: IBM), whose shares went up by 3.8% after releasing better-than-expected second-quarter results. Coca-Cola's (NYSE: KO) earnings went up by 18% after recent bottler acquisitions and a strong growth volume overseas. Johnson & Johnson had a profit decline of 20% with its previously announced exit from the heart device market.

Despite offsets, the market rallied over the improvement in consumer goods, which could mean an improvement in consumer spending. Read more at The Wall Street Journal.

Housing starts reach five-month high
Housing starts improved for the month of June, helping the housing market see the light at the end of the tunnel. Work began on about 629,000 houses, up by 15% from May. An unexpected 2.5% rise in building permits is a sign of increasing construction in the future. Some construction companies, like Lennar, believe the worst of the crisis has passed, even though the recovery will still be slow. Foreclosures and declining home values remain an anchor for the market and will take years to correct. Read more at Bloomberg.

Bye-bye, Borders
After a difficult bankruptcy filing and receiving no bids to save it, Borders Group said it would liquidate its remaining 399 stores. The second-largest bookstore in the nation started its demise after failing to innovate in an Internet-based world. Competitors like Amazon (Nasdaq: AMZN) and Barnes & Noble (NYSE: BKS) entered the market with their Kindle and Nook devices. The liquidation is expected to end by September. Read more at The Wall Street Journal.

So there you have it, the top financial stories for this afternoon. Check for commentary on these and other stories. Also, follow us on Twitter, on Facebook, or through our email digests.

Michelle Zayed owns no shares of any companies mentioned in the story. The Motley Fool owns shares of Coca-Cola and International Business Machines. The Fool owns shares of and has opened a short position on Bank of America. The Fool owns shares of and has created a ratio put spread position on Wells Fargo. Motley Fool newsletter services have recommended buying shares of and Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.