Goldman Sachs stock fell to its lowest level since April 2009 after the bank admitted it had a “disappointing” second quarter.

The New York-based investment firm made $1.09 billion, or $1.85 a share. That’s up from the year-ago $613 million, or 78 cents a share, but those numbers were hit by a $550 million legal settlement and a $600 million hit on the U.K. bank tax. Revenue at Goldman gs  fell 18% from a year ago to $7.3 billion.



Not a pretty picture

The top and bottom line both fell well short of expectations: Analysts were forecasting a profit of $2.27 a share on revenue of $8.1 billion. The results are the latest example of the crunch being felt across the banking sector as traffic slows at the casino Wall Street has leaned so heavily on for earnings in recent years.

“During the second quarter, the operating environment was more difficult given global macro-economic concerns,” said CEO Lloyd Blankfein. “In addition, certain of our businesses had disappointing results as we reduced our market risk in response to attempting to manage fluctuations in prices and market liquidity.”

Goldman said investment banking revenue rose 54% from a year ago, but its trading businesses were hit hard by the spring market slowdown. Equities trading revenue rose 19%, but revenue in the big fixed income, currencies and commodities unit plummeted 53% from a year earlier, as volume evaporated and the firm pulled back from risky positions.

High levels of uncertainty and decreased levels of liquidity during the quarter contributed to difficult market-making conditions, particularly in mortgages and commodities, and prompted the firm to operate at generally lower levels of risk. In addition, net revenues in currencies decreased slightly and net revenues in credit products were essentially unchanged compared with the second quarter of 2010. During the quarter, Fixed Income, Currency and Commodities Client Execution operated in a challenging environment reflecting broad market concerns and uncertainty, which led to slightly lower levels of activity. The effect of these macro concerns was more pronounced within the firm’s Asian and European franchises.

The latest setback will do nothing to dispel chatter about Blankfein’s departure. Goldman shares have fallen 23% this year heading into Tuesday, and they dropped a further 4% in premarket trading. At $125 they are at their lowest level since the last days of the financial crisis in the spring of 2009.