New York: US stocks were little changed on Friday, reversing earlier gains after Facebook Inc stumbled in its market debut after a delayed opening.
Shares of the social networking giant were volatile in early trading, falling to near breakeven levels after early gains of more than 10 %. In early trading it was the Nasdaq’s most actively traded stock, with more than 100 million shares traded in the first five minutes of trading.
After a delay in the opening print that drove up anxiety levels among traders and onlookers outside the Nasdaq, the company’s closely watched stock began trading at $42.05, compared with an IPO price of $38. It rose as high as $45 before pulling back.
People gather outside the NASDAQ Marketsite waiting to see Facebook’s share prices posted inside on video monitors in New York on 18 May 2012. Reuters
The Nasdaq said it was investigating an issue in delivering trade execution messages from the IPO cross in Facebook.
“We’re under a little bit of pressure after this less-than-amazing opening, which is not elevating the market like some had speculated,” said Frank Davis, director of sales and trading at LEK Securities in New York.
Shares of companies in the online social media sphere were trading lower. LinkedIn fell 0.6 % to $104.28 and Groupon Inc fell 5.5 % to $12.20. Zynga was halted down 13 % at $7.17.
With the decline, the S&P 500 is on track for a sixth straight day of declines as well as its worst week since the last week of November.
The Dow Jones industrial average was up 0.91 points, or 0.01 %, at 12,443.40. The Standard & Poor’s 500 Index was up 1.18 points, or 0.09 %, at 1,306.04. The Nasdaq Composite Index was down 0.14 points, or 0.00 %, at 2,813.55.
The S&P has fallen 6.8 % so far in May, largely on the back of uncertainty over a political crisis in Greece and whether that could trigger a default and possible exit from the euro zone. While volatility is expected to continue, some analysts were forecasting a near-term rebound as valuations become more attractive.
While much of the market’s focus was on Facebook, uncertainties continued to swirl around Europe, and investors remained skittish even as a poll showed Greek voters are returning to the establishment parties that negotiated its bailout.
The cost to insure Spanish government debt against default hit record highs Friday, a day after Moody’s cut its ratings on 16 Spanish banks, heightening fears of contagion from the Greek political crisis.
Spanish government-run Bankia shares, up more than 25 % on the day but still down 31 % this month, led a rebound in Spanish banking stocks as traders closed short positions. US-traded shares of Banco Santander and BBVA rose more than 4 % each.
Shares of Foot Locker jumped 10 % to $30.82 after the athletic footwear retailer posted higher-than-expected quarterly results.
Winnebago Industries Inc surged 5.8 % to $9 after receiving an unsolicited buyout offer from North Street Capital LP, the investment firm of racing car enthusiast Alex Mascioli, valuing the No.1 US motor homes maker at $321.5 million.
The Dow Jones industrial average was down 7.34 points, or 0.06%, at 12,435.15. The Standard & Poor’s 500 Index was up 0.64 points, or 0.05%, at 1,305.50. The Nasdaq Composite Index was down 5.14 points, or 0.18%, at 2,808.55.
Excitement about Facebook’s initial public offering (IPO) gave US stocks a small lift in morning trading on Friday.
Higher stocks prices would be a relief for investors. The Dow has fallen in 11 of the past 12 trading days, including a loss of 156 points on Thursday. It’s now down 6% so far this month.
Europe could still hurt investor enthusiasm. Representatives of the G-8 are headed to Camp David this weekend, looking for assurances that leaders in Europe can contain damage from a potential collapse in Greece. And after an election in Greece that brought in political parties opposed to bailouts for the beleaguered country, the Fitch ratings agency dropped the nation to the lowest possible grade for a country not in default Thursday.
Fitch said that if elections next month do not reverse the political trends in Greece, that the country’s departure from the euro “would be probable.”
Also, ratings agency Moody’s downgraded 16 Spanish banks late Thursday, three days after downgrading Italy’s, noting they are vulnerable to huge losses on government debt.
In the US, shares of Salesforce.com jumped 11% after the maker of web-based business software reported better-than-expected earnings and raised its guidance for the year. Gap fell 1.6% despite higher guidance for the year.