Dow 12,505 (+1.09%) S&P 1,316 (+1.60%)
Welcome back MarketSnacks Nation faithful. Welcome back workweek. Welcome back positive stock numbers. Morale has been low here on Wall Street as of late….The Dow Jones Industrial Average took a full-on smacking recently, finishing down in 12 of the last 13 trading sessions – in fact, the 5 negative days last week resulted in its worst weekly performance in 6 months. But like a tense slingshot slowly pulled back, the markets finally snapped forward today with an overdue 135 point gain following the weekend G-8 meeting. All eyes though were really on Facebook (FB) as shares of the social-networking juggernaut stumbled on the first trading day after Friday’s initial public offering (IPO).
G-8 leaders vow to help Europe, China’s Premier aims to boost consumption
The “Group of Eight” conference in Chicago brings together the leaders of the largest countries to discuss global issues, similar to an All-Star game version of the classic Disney “It’s A Small World After All” ride. On Saturday, the G-8 pledged to support keeping Greece in the euro, a major concern after the failure of the Greek government last week to agree on a unified policy for their debt crisis. After some criticism though that the G-8′s plan was too ambiguous, the real boost today came from China, after Premier Wen promised to lower taxes to encourage spending and prevent a slowdown in the world’s second-largest economy. China’s strong production-focused economy has been and will continue to be critical for sustaining global growth.
Facebook stock drops 11% on 2nd day of trading, Mark Zuckerberg’s fortune falls $2.2 billion
Mark Zuckerberg celebrated his company’s IPO by tying the knot with his longtime girlfriend over the weekend, and posted photos of the ceremony on his wall (though he has yet to change his status from “single” to “married”, also known as “Facebook-consummation”). The markets had no mercy though for the newlywed as FB stock finished down 11% today. The slide started Friday afternoon when it gradually fell from highs of $45, but was rescued when Morgan Stanley (MS) intervened in the market by buying shares to support the price and prevent what would have been an embarrassing negative first day of trading. Without the support from the investment bank today, the stock was down 14% by midday. MS is being blamed by critics for setting the IPO price too high at $38 and for supplying too many shares than were demanded by investors. Early investors are ideally supposed to be rewarded by gains in the first days of trading, but instead each has lost almost $4 per share. How do you test a marriage? Have the husband lose $2.2 billion of his wealth on his first workday.
- The first round of a bunch of US housing data this week – Can “Existing Home Sales” from April give us back-to-back positive days for the first time in forever?
- The “Organisation for Economic Cooperation and Development” (OECD) twice-yearly global outlook – a nice alternative perspective on how certain industrial countries are doing.
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