Friends
Well, Facebook day was a major disappointment. There was a technical glitch on NASDAQ which resulted in a 45 minute delay in opening the stock and then traders could not get fill reports on what they paid for buy orders or what they received for sell orders. It’s hard to sell shares of a stock when you don’t know what you paid for it. All in all, the first day of trading was a flop. The stock jumped into the $40’s on the first trades but traded back down to $38 shortly thereafter, where the syndicate participants doggedly fought to defend (support) the shares for most of the day (they could not let it break $38 for fear of enormous embarrassment). If someone bought the first trades and got filled at $45 (although even by the close, people did not know what they were filled at), only to see it close by the end of the day near $38, then it was a very disappointing day. For those who were trying to flip it on the open, they still are trying to figure out what they got for it. Like I said this morning, if you want to own Facebook long term, let the dust settle and then buy it and put it away.
For the day the Dow Jones Industrial Average was down 73 points to close at 12,369. The S&P 500 was down 9 points to finish the day at 1295. Gold was up for the second day in a row with the precious metal up $15 to trade at $1589 per ounce. Oil was down $1.47 to trade at $91.89 per barrel WTI.
With the G8 meeting this weekend, Greece and Europe were weighing on the market, and that coupled with a disappointing first day of trading for Facebook, caused traders to step away from the table and let share prices fall. We’ve seen a drop of more than 7% for May to this point and with the S&P 500 closing under 1300, it sure looks like we may be testing the 1257 level that we began the year at. It was a nice first quarter, but May seems to be wiping out all the gains. We felt a little underinvested in the first quarter, but now we are glad we have a good cash position on hand. As always, volatility produces opportunity.
Have a great weekend everyone.
