NEW YORK (AP) - Goldman Sachs Group Inc., the largest Wall Street investment house, on Tuesday said its first-quarter profit rose 29 percent to a company record on robust trading gains and investment banking fees. Its shares rose 2 percent.

New York-based Goldman reported earnings applicable to common shareholders rose to $3.15 billion, or $6.67 per share, for the quarter ended Feb. 23, compared to $2.45 billion, or $5.08 per share, in the year-ago period.

Revenue rose 22 percent to $12.73 billion from $10.43 billion in the year-ago period.

Results surpassed Wall Street projections for earnings of $4.97 per share on $10.69 billion in revenue, according to analysts polled by Thomson Financial.

"While market conditions will regularly shift, we are confident that our client-driven strategy will continue to produce the strongest results for the firm," said Chairman and Chief Executive Lloyd Blankfein in a statement.

Goldman is the first of the Wall Street investment banks to report first-quarter results, with Lehman Brothers Holdings Inc., Bear Stearns Cos., and Morgan Stanley Inc. on tap in the coming days.

There has been increased uncertainty about the outlook for financial markets after the global stock swoon on Feb. 27, and growing concern about the effect a meltdown in the subprime mortgage industry will have on Wall Street. Goldman is among the lenders to New Century Financial Corp., the second-biggest mortgage lender to people with shaky credit histories.

Irvine, Calif.-based New Century announced Monday it lost support from its financial backers. This has fanned concern that investment banks may be swept into the fray because of declining home loans and mortgage-backed securities.

David Viniar, Goldman's chief financial officer, said Goldman's exposure to the market is "modest" when compared to the investment bank's overall business. He said Goldman began to reduce its exposure to subprime loans about two months ago after noticing instability.

"Loans were made that should have not been made by companies making them that shouldn't have been making them," he said in a conference call with reporters. "There will be a shakeout in the mortgage business. And, there will be a subprime market when it's all done, but smaller than it has been in the past."

Viniar could not quantify exactly how much exposure Goldman has to subprime loans, and said troubles "have been contained in the subprime market." He pointed out there were revenue gains from mortgage and credit products during the quarter.

Goldman's fiscal first quarter ended four days before the Dow Jones industrials plunged 416 points, so there would have been no impact on the reported results. The quarter is typically the strongest for investment banks as companies start the year with new stock offerings, acquisitions and borrowing.

Trading continued to be Goldman's biggest business, representing 74 percent of its total revenue. The strong stock market rally last year helped trading revenue rise 35 percent to $9.42 billion.

Revenue from trading fixed-income, currencies and commodities, Goldman's biggest business, rose 20 percent to $4.6 billion. Equities trading revenue climbed 26 percent to $3.1 billion.

Goldman, the world's No. 1 adviser on acquisitions for the past five years, reported investment banking revenue rose 17 percent to $1.72 billion. Goldman's asset-management and securities-services division, which includes lending and other services to hedge funds, reported a 19 percent drop in revenue to $1.6 billion due to lower incentive fees.

Goldman's shares rose $4.40, or 2.2 percent, to $207 in morning trading on the New York Stock Exchange.