TOPWRAP 7-Obama hails US stimulus; Goldman results cheer

(For full financial crisis coverage click on [nCRISIS])

* Obama: infrastructure stimulus "ahead of schedule"
* Goldman Sachs posts better-than-expected Q1 earnings
* U.S. to host G7 and G20 meetings this month
* China stronger than expected, deflation looms in Japan
* U.S. shares rebound, focus on banks

(Recasts with Goldman results; adds U.S. market close)
By John O'Callaghan
WASHINGTON, April 13 (Reuters) - U.S. efforts to stimulate
the economy with infrastructure projects are "ahead of schedule
and under budget," President Barack Obama said on Monday, while
Goldman Sachs' earnings offered hope of a recovery in banking.
"The market is cheering, not so much that the banks are on
the mend but that they are not going to die," said Les Satlow,
portfolio manager of Cabot Money Management in Salem,
Massachusetts. "My view is that a key crisis phase of this
economic downturn is behind us."
Obama will give a "major" speech on the economy on Tuesday,
the White House said. Federal Reserve Chairman Ben Bernanke is
also due to speak about the financial crisis on Tuesday.
After the closing bell, Goldman Sachs beat forecasts
by posting first-quarter earnings of $1.66 billion, helped by
strong trading revenue.
Goldman said it planned to raise $5 billion of common
shares and use the proceeds, plus additional funds, to repay
the $10 billion of capital it got from the U.S. government
under the Troubled Assets Relief Program. [nN13387020]
Despite the encouraging U.S. developments, data from China,
Japan and India offered mixed signals as investors and analysts
remained concerned about how quickly the global economy can
bounce back.
Further evidence of the state of the U.S. economy will come
this week with retail sales, housing and industrial production
data. But some analysts see little hope of a meaningful
rebound.
"I'm still very pessimistic about the prospects of any
enduring recovery," said T.J. Marta, chief market strategist at
Marta on the Markets, in Scotch Plains, New Jersey.

MORE G7 MEETINGS
Seeking a concerted escape from the worst crisis since the
Great Depression, finance ministers from the Group of Seven
leading nations will meet in Washington on April 24 and follow
that with a Group of 20 ministerial session.
U.S. Treasury Secretary Timothy Geithner will host both
meetings, which come just weeks after the G20 leaders' summit
in London and before semi-annual gatherings of the
International Monetary Fund and World Bank. [nN13374603].
The G20 has agreed on a $1.1 trillion deal to fight the
crisis, including a huge infusion of funds for the IMF. But
differences persist over what steps should be taken to rebuild
the financial sector, free up lending and boost economies.
In a key part of Obama's $787 billion stimulus plan, the
United States is embarking on thousands of major infrastructure
projects to create jobs and shore up highways, bridges and mass
transit systems. [nN13376942]
"This government effort is coming in ahead of schedule and
under budget," said Obama, who has also pushed tax cuts and
reforms of the healthcare and energy sectors. "It is now clear
that day by day, project by project, we are making progress."
A jump in China's industrial output last month, along with
a record rise in new lending, lent credence to the idea that
the bottom of the crisis may not be far away and lifted the
Chinese yuan and stocks in Shanghai. [nSP469226]
But data showing a big fall in Japanese wholesale prices
suggested the world's second-largest economy is sliding back
toward deflation. [nT344226]
In India, a huge emerging market, the effects of the global
downturn slowed economic growth to just below 7 percent in the
2008/09 fiscal year that ended in March, Prime Minister
Manmohan Singh said. [nDEL472815]

BANKS CHEER U.S. INVESTORS
U.S. stocks [.N] cut losses, with the S&P 500 <.SPX> and
Nasdaq <.IXIC> indices closing slightly higher as investors
snapped up financial shares on hopes quarterly results of major
banks will show stabilization returning to the sector.
The S&P financial index <.GSPF> rose 4.81 percent.
Besides Goldman Sachs, other U.S. heavyweights reporting
results this week include JPMorgan , Citigroup ,
General Electric and Intel .
The Dow Jones industrial average <.DJI> slipped 0.32
percent after Boeing gave a gloomy profit forecast and
slashed production, reviving investor worries.
The market was also weighing a report that the Treasury has
told General Motors to prepare for a fast "surgical"
bankruptcy if GM fails to reach agreement with bondholders to
exchange about $28 billion in debt into equity and with the
auto workers union on concessions. [nN12356870]
GM shares fell more than 16 percent.
As GM rival Chrysler [CBS.UL] races to complete a
partnership deal with Fiat to stave off bankruptcy,
Automotive News reported the two companies are discussing a new
management team and board for Chrysler. [nN13379585]
Markets in Hong Kong and Australia were shut for the Easter
break, as were most European markets.
Oil dropped nearly 4.3 percent to just above $50 per
barrel after the International Energy Agency deeply cut its
forecast for oil demand.
The dollar and yen both fell against the euro as a heartier
appetite for risk eroded the safe-haven appeal of the U.S. and
Japanese currencies. U.S. government bond prices rose as the
Fed stepped up purchases of Treasury and agency debt.
China is planning a new economic stimulus package to boost
consumption, the China Securities Journal reported, citing a
senior official of the State Information Center. [nSHA22356]
But an adviser to China's central bank said the economy was
unlikely to hit bottom soon, while the Ministry of Finance said
the outlook for fiscal revenue in the coming months was "not
optimistic." [nPEK394] [nPEK43527]
In Japan, the economic situation remained bleak. With
interest rates already near zero, analysts say the Bank of
Japan has limited weapons to hand.
"If prices continue to slide, the BOJ may need to expand
its government bond buying and move toward quantitative
easing," said Norihiro Fujito, general manager at Mitsubishi
UFJ Securities.
(Reporting by Jason Subler in Beijing, Yuzo Saeki in Tokyo,
Glenn Somerville and John Whitesides in Washington and Edward
Krudy in New York; Editing by Dan Grebler)
((john.ocallaghan@thomsonreuters.com; +1 202 789 8015))
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Keywords: FINANCIAL/

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Keywords: FINANCIAL/

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