Wall Street Little Changed After Facebook Debut
By REUTERS
Published: May 18, 2012
Stocks on Wall Street traded marginally lower Friday, setting up major market indexes to close their worst week of the year, even as Facebook stock rose in its debut.
The Standard & Poor’s 500-stock index gained 0.1 percent in afternoon trading, and the Dow Jones industrial average lost 0.1 percent. The Nasdaq composite index, which includes Facebook, fell 0.1 percent.
The S.&P. 500 has fallen 6.7 percent so far in May, and while volatility is expected to continue, some analysts were forecasting a near-term rebound as valuations become more attractive.
Facebook was trading around its offering price, $38 a share, trimming its gains after an early rise of about 10 percent.
The large weekly decline in equities comes amid uncertainty over a political crisis in Greece and whether that could trigger a default and possible exit from the euro zone.
Market participants were skittish even as a poll showed Greek voters are returning to the establishment parties that negotiated its bailout.
“Even good news is not enough to overcome the fear that there is going to be a dramatic slowdown in the world economy because of the European crisis,” said Rick Meckler, president of investment firm LibertyView Capital Management in New York.
“Today, Facebook trading up would be a good start,” he said, adding that a decline below the IPO price “could be a big negative for the market.”
Shares of companies in the online social media sphere were active at the opening. LinkedIn rose 2.4 percent to $107.45 and Groupon added 2.6 percent to $12.73.
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 percent for the day but still down 31 percent this month, led a rebound in Spanish banking stocks.
European markets were mostly up, but not by much. The Euro Stoxx 50 added 0.2 percent in late trading, while the DAX in Germany fell 0.1 percent and the CAC 40 in France rose 0.3 percent. The FTSE 100 index fell 0.8 percent.
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