Goldman shares fall as analysts see bigger loss

People enter and exit 85 Broad Street, headquarters of investment bank Goldman Sachs in New York, October 23, 2008.

NEW YORK (Reuters) - Goldman Sachs Group Inc (GS.N) shares fell Tuesday on speculation the bank's fourth-quarter loss could be much larger than expected -- more than $2.5 billion -- fueled by the plunging value of many Goldman investments.

The shares fell as much as 6 percent, rose briefly in volatile trading, then settled at $64.78, off 1.5 percent. They are down 70 percent this year.

For the past month, Goldman has been widely expected to post its first quarterly loss since going public in 1999. But poor market conditions got even worse last month as the U.S. Treasury abandoned its proposal to buy hard-to-trade mortgage securities and other debt from hard-hit banks.

Atlantic Equities analyst Richard Staite on Tuesday widened his loss forecast for Goldman to $4.65 a share, or $2.3 billion, for the fiscal fourth quarter ended November 28. Staite forecast that falling equity and debt values will trigger more than $9 billion of writedowns.