In the strange thinking that passes for logic on Wall Street, shares of Citigroup stock were expected to surge today after the company announced yet another huge quarterly loss. In fact, shortly after the announcement, the stock was up 7 percent in pre-open trading.

The big bank lost $5.1 billion ($1.02 per share) during the first quarter, largely because of continuing problems with mortgages and leveraged loans. Writedowns related to mortgages and other credit market problems totaled around $12 billion and another $3 billion related to consumer credit problems was also written down.



However, investors were expected to gobble up the stock and generally shore up the stock market on Friday because the losses were not as bad as had been expected and were only about half of the $10 billion the bank lost in the previous quarter.

At that frantic time in the bank's history Citigroup removed its CEO Chuck Prince and raised over $30 billion in capital through sale of stock and assets. Much of the money came from investor funds run by Asian and Middle Eastern governments. The bank has also reduced its payroll by 4,200.

Citigroup still has big exposure to bad mortgages and leveraged loans and with the release of first quarter results, Moody's Investors Services changed its ratings for Citigroup to negative citing the high level of writedowns, however actual losses had come in very close to the average expected by most analysts.