No Spark In Facebook IPO As Markets Fall

Includes: DIA, FB, QQQ, SPY
by: Midnight Trader
  • Dow Jones Industrial Average down 73.11 (-0.59%) to 12,369.38
  • S&P 500down 9.64 (-0.74%) to 1,295.22
  • Nasdaq Composite Index down 34.90 (-1.24%) to 2,778.79


  • Hang Seng Index down 1.30%
  • Shanghai China Composite Index down 1.44%
  • FTSE 100 down 1.33%

Stocks turned negative near mid-day, closing down for a sixth day in a row after Facebook's (NASDAQ:FB) much anticipated first day of trading started late and failed to generate the big first-day rise traders were hoping would carry the rest of the market higher.

Worries about possible debt defaults in Europe again dragged on equities and many investors appear to have pulled their long bets heading into the weekend, which will feature leaders from the world's largest economies meeting in rural Maryland to discuss the ongoing crisis. Nearly all industry sectors in the S&P 500 ended lower today, with only utility stocks holding on to tiny gains late in the day.

Facebook shares began trading 30 minutes after their scheduled 11 a.m. start after the Nasdaq exchange ran into problems getting the stock open following its $16 billion initial public offering last night. The stock opened 10% above its $38.00 a share IPO price, higher at $42.00, with shares quickly reaching a peak at $43.10 each before soon turning south for good. FB traded in a rather tight range between $38 to $40 a share, eventually falling back to even for the day just before the close.

The excitement surrounding Facebook's initial public offering largely overshadowed worries about Europe's debt crisis. G-8 leaders are meeting at the U.S. presidential retreat at Camp David, Md., this weekend with discussions set on a possible exit by Greece from the euro and other economic upheaval in the European Union.

In other company news, JPMorgan Chase & Co. (NYSE:JPM) shares finished with a 1% loss today amid reports that the bank could eventually lose as much as $5 billion from its failed derivatives strategy, according to the Wall Street Journal.

Chief Executive Officer Jamie Dimon personally approved the strategy that led to the trades, without monitoring how they were executed, the newspaper said, citing people familiar with the matter that it didn't identify. His failure to closely regulate that activity caused resentment among executives whose departments face tighter oversight, according to the Journal.

Commodities were mixed. June crude oil closed $1.03 lower at $91.51 a barrel while June natural gas rose 15 cents to $2.75 per 1 million British thermal units. June gold rose $17.30 to finish at $1592.10 an ounce while July silver rose $0.68 to $28.72. July copper fell a penny to $3.47.


(+) WGO, Confirms $11-a-share buyout offer from private-equity company.

(+) PSUN, Beats Q1 EPS estimates by $0.09 despite posting $0.20 a share net loss.

(+) OSIR, Stem Cell Drug, Prochymal, Receives Marketing Clearance from Health Canada

(+) BWS, Q1 profit beats by $0.14 a share; guides FY12 EPS, revenues above consensus.


(-) ARUN, Q3 profit rises 88%, in-line with estimtes; guides Q4 revenues below Street.

(-) BRCD, Fiscal Q2 profit climbs 51% as margins improve, interest costs decline.

(-) ADSK, Guides Q2 sales of $580 million to $600 million, just missing estimates.

(-) GSS, Issues $77.5 million of 5% convertible senior unsecured debentures due 2017.