Goldman Sachs shares gain on analyst upgrade

BOSTON (AP) -- Shares of Goldman Sachs rose on Tuesday to their highest level in nearly nine months after an analyst upgraded the stock, saying the investment bank is well-positioned heading into 2013.

THE SPARK: Doug Sipkin of Susquehanna Financial Group raised his rating of Goldman Sachs shares to "Positive" from "Neutral," and increased his price target for the stock to $149 from $127.

THE ANALYSIS: Sipkin said in a note to clients that Goldman Sachs "appears more right-sized" in its staffing levels, while competitors "are still shrinking." He also said that the New York-based company is in position to capitalize if congressional leaders and the White House reach a deficit-reduction agreement to avert the "fiscal cliff" of automatic tax increases and spending cuts that could take effect in two weeks. A positive resolution could lead to higher interest rates, which Sipkin said could enable Goldman Sachs to improve its competitive position as a clearinghouse for bond traders. Goldman Sachs "remains one of the few prominent bond market makers," Sipkin said.

SHARE ACTION: Shares of Goldman Sachs Group Inc. rose $3.65, or 3 percent, to $127.14 in afternoon trading. They traded as high as $127.90 earlier in the session. That's the stock's highest level since it reached a 52-week high of $128.72 in late March. The stock is up almost 10 percent in the past month and about 41 percent this year.