Coming into today, the Dow Jones Industrial Average (INDEX: ^DJI) was already down 378 points for the week, and investors were desperately looking for some good news to reverse the market's fortunes. While the Dow started the day above water, by 2:50 p.m. ET, it was down 0.5%.
The long anticipated Facebook (Nasdaq: FB) IPO got under way when shares started trading at 11 this morning. Despite the enthusiasm, the stock didn't pop as much as other recent IPOs such as Groupon, which gained more than 50% in its first day of trading. Initially priced at $38, shares of the social network traded as high as $45, before settling in near $41 for an 8% gain. Before 2 p.m., nearly 350 million shares had been traded in just three hours.
The IPO also weighed heavily on social gamer Zynga (Nasdaq: ZNGA), which was down around 8% as of writing, and trading was halted twice after a sudden drop of 13%. Since Zynga derives much of its revenue through Facebook, investors may be trading shares of the gamer for the dominant social network. Shares of other "Web 2.0" stocks such as Linkedin, Pandora, Yelp, and Groupon were all down 4% or more.
Turning to Dow stocks, Hewlett-Packard (NYSE: HPQ) was the biggest mover on the index, dropping 2.5%. The company confirmed reports this morning that it will cut 30,000 jobs, as CEO Meg Whitman has stressed a desire to allocate more money into research and development, funding for which has flagged in recent years. The PC maker has struggled to catch up with the mobile revolution, and revenues are projected to drop 4% this year. The company reports quarterly earnings on Wednesday, with analysts estimating EPS of $0.91.
Caterpillar (NYSE: CAT) was the top performer on the Dow so far, gaining 1% in midday trading. The manufacturer sees an opportunity in the State Department's announcement yesterday to lift sanctions in Myanmar, and among other changes, the company will now be able to carry out financing activities in the country. Asia has been a huge market for the heavy-equipment maker, but growth has slumped in China recently, as construction has cooled off there. Caterpillar shares may also be bouncing back from a 4% loss yesterday, when it reported disappointing sales.
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