Goldman earnings strong, Geithner upbeat

By Steve Eder and Krista Hughes

NEW YORK/MANNHEIM (Reuters) - Strong Goldman Sachs profits and rising U.S. retail sales fanned optimism Tuesday that global recession may be waning, but Europe showed signs of only stuttering economic recovery at best.

Wall Street's largest surviving investment bank announced better-than-expected second quarter results, while sales at U.S. retailers beat expectations with a 0.6 percent rise in June, boosted by a big jump in auto sales.

Both appeared to back up U.S. Treasury Secretary Timothy Geithner, who said that a global assault on recession was making headway and acknowledged that Washington bore a special responsibility to help spur a recovery in the world economy.

Goldman Sachs Group reported a 33 percent rise in earnings as a strong gain in trading was offset by a one-time charge to repay government loans.

"They're terrific numbers...I think things are very fragile but they manage to make money in all environments which is what you're supposed to do." said William Smith, chief executive of Smith Asset Management in New York.

"You're going to see absolutely enormous numbers coming out of the money centres, including Citigroup," he added.

Goldman, the first major U.S. bank to report quarterly earnings in the current cycle, saw its performance bolstered by improving markets and strong trading results.

But gains were tempered by a one-off $426 million (261 million pounds) charge related to the repayment of $10 billion in loans from the U.S. Treasury's Troubled Asset Relief Program, known as TARP.