Stocks Get a Boost, But Can it Last?
Finally, a rally on Wall Street. Investors jumped back into stocks Monday, even if just momentarily; the rally sent the Dow up 1%, the Nasdaq up 2.5% for its best day of the year, and the S&P 500 gained 1.6%.
Volume was the lightest in a week, suggesting the gains may have been exaggerated and yesterday's rally wasn’t anything more than a one-day pop. With earnings season winding down, and questions surrounding Greece until new elections on June 17, many investors may just sit on their hands this summer.
That's exactly what they're doing this morning. as U.S. futures are flat to slightly lower.
Facebook (NYSE:FB) shares are lower, again. The social stock sank a whopping 11% yesterday in its second day of public trading. Closing near $34, Facebook is now $4 below its IPO price, and the stock is lower Tuesday morning.
There's been nothing "normal" about Facebook's coming to market. To start, the company increased not only its share price range but also its offering size just days before the IPO. Analysts say Facebook overestimated investor demand and put too many shares on the market.
Also, lead underwriter Morgan Stanley (NYSE:MS) unexpectedly delivered some negative news to its major clients just days before the IPO. The unusual and sudden caution, so close to the debut, was a big shock to some. Morgan Stanley analysts expressed caution about Facebook's revenue growth especially pertaining to mobile devices.
With all the talk about Facebook, many investors may have forgotten Apple (NASDAQ:AAPL) -- the most valuable company in the world. The tech giant gained 6% yesterday, helping to boost the market overall. Facebook represents 4% of the S&P 500 and 12% of the Nasdaq. So, when Apple moves in one direction, the market often follows it.