It's been a tough week for the stock market, which is ending on a desultory note as Facebook's (FB) much-hyped IPO struggled.
After pricing at $38 per share last night, underwriters were forced to delay the opening trade in Facebook Friday morning by about 30 minutes due to what the Nasdaq called "an issue in delivering trade execution messages."
Once it began trading, Facebook rose modestly to around $45, then quickly retreated back to its $38 offering price. The stock stabilized there amid reports underwriters JPMorgan and Morgan Stanley were buying shares in order to ensure it didn't break its offering price. The stock closed flat at $38.32 a share, but did set a record for volume traded for an IPO. More than 550 million shares traded hands Friday.
For one day, at least, the Facebook IPO delivered yet another blow to investor confidence, which was further damaged this week by the ongoing trading losses at JPMorgan (JPM). (See: "It's Getting Worse": Why JPMorgan Is Struggling to 'Move On' from Its Bad Trade)
Above all else, investors were spooked this week by the news out of Europe, featuring the much more real possibility of a Greek exit from the eurozone as well as fears of a run on Spanish banks.
As I discuss in the accompanying video with my Breakout colleague Jeff Macke, the developments in Europe generally and JPMorgan specifically have put the issue of "systemic risk" back on the table.
"This not a 'sell everything and hide' call...but cash feels kinda comfy here," Macke says. "It's not a time to panic but it's not a time to get all brave either."
A week ago, you could argue the market was holding up well in the face of bad news, which is arguably a bullish sign. But this week told a very different story, one of a market that's looking increasingly wobbly. Considering the Dow (DJI) and S&P 500 (GSPC) are still up year to date, there's a risk that the heavy selling may have only just begun.