Finance & Business World

Even the hottest initial public stock offerings can lose steam after their first day of trading.

Sure, company insiders will make money selling at the opening price. And investors who used connections or big bucks to score shares at the IPO price will profit if they sell after a first-day “pop.”

For everyone else, the wildly mixed record of other ballyhooed IPOs beyond their first trading session offers a lesson. It’s one that should remind us that buying Facebook stock Friday provides a chance to lose money.

It’s understandable that everyone wants to get in early on what could be the next Google. Shares of the Internet search leader had an initial offering price of $85 in 2004, started on the stock market at $100 and climbed above $700 by 2007. Even after moving sideways for more than four years, they’re still above $600.

But odds are against hitting a grand slam like that in the current market.

Cautionary points to weigh if the Facebook frenzy is tempting you to buy stock on Day 1:

YOU’LL PAY MORE FOR YOUR STOCK THAN THE SMART MONEY DID.

The vast majority of average investors couldn’t get in at the $38-per-share offer price. Those shares went largely to company insiders, the deal’s underwriters or their fat-walleted clients. The price almost always shoots quickly higher by the time orders to buy at the market price kick in no fax cash loans.

SEVERAL OF LAST YEAR’S “MUST-HAVE” IPOS AREN’T ANY MORE.

— Pandora, an Internet radio company, went public June 15 at $20 a share. You could have bought the stock during the day for $26. It’s now trading under $11.

— Groupon, the online daily deal company, priced its stock at $20 a share in its Nov. 4 IPO. The stock traded above $31 the first day. Now it’s under $13.

— Zynga, the developer of “FarmVille” and other Facebook games, went public at $10 a share on Dec.16. The stock traded as high as $11.50 on its opening day. Lately it’s around $8.

— Even one of last year’s IPO stars isn’t a huge winner when you factor in the risk. LinkedIn more than doubled from its $45 offer price within minutes of hitting the market last May 19 and reached $122.70 before closing the first day at $94.25. It’s back to around $105 after a turbulent year, with a modest overall gain of 11 percent since the first day.

Buy-and-hold investors who want to make money off Facebook should hold off on the first day of trading. Maybe later they can think about buying.

Dave Carpenter is a AP’s personal finance writer

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South Korea added workers last month and the unemployment rate held at two-month low as demand increased for jobs in health, social welfare and education.

The rate was 3.4 percent in April, Statistics Korea said today in Gwacheon, south of Seoul, matching the median estimate in a Bloomberg News survey of 12 economists. The number of employed people increased 1.9 percent to 24.76 million last month from a year earlier.

South Korea

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U.K. house prices dropped the most in 1 1/2 years in April as a stamp-duty exemption for first-time buyers ended and the economy fell into its first double-dip recession since the 1970s, Halifax said.

Prices dropped 2.4 percent from March, the largest monthly decline since September 2010, to an average 159,883 pounds ($258,700), the mortgage unit of Lloyds Banking Group Plc (LLOY) said in a statement in London today. Prices had risen 2.2 percent in March. From a year earlier, values were down 0.6 percent.

Surveys show the property market is struggling to gain traction as banks limit lending and consumers are squeezed by rising energy prices. Demand for homes was boosted earlier this year as first-time buyers took advantage of a tax exemption on purchases of homes costing less than 250,000 pounds before it ended in March. Consumer confidence may be undermined after data last week showed the economy shrank in the first quarter.

Air Canada and its largest union, which represents 8,600 baggage handlers, ground crews and machinists, have agreed to return to the negotiating table.

The move comes amid rumblings of another possible illegal disruption on Friday afternoon by members of the International Association of Machinists and Aerospace Workers.

But with the promise to restart talks, organizers have called off the 1 p.m. sitdown.

In an email to employees, Air Canada

The fear trade picked up steam Tuesday, as investors grew increasingly worried about Europe’s fiscal health. All three indexes closed down more than 1.5%, marking the fifth straight losing day for stocks.

Early in the day investors, traded out of stocks after reading headlines about rising borrowing costs for Spain and Italy. As the day progressed, investors grew increasingly jittery over the health of the global economy, which caused the sell-off to intensify.

"People are starting to get very concerned about the macro picture of both sovereign debt and China’s slowing growth," said Sam Ginzburg, head of trading at First NY. "We’re starting to get very worried about going back to a recession."

The Dow Jones Industrial Average () closed down 214 points, or 1.7%, capping off the worst day since November 2011. The S&P 500 () lost 24 points, or 1.7%. The Nasdaq () fell 56 points, or 1.8%.

The S&P 500 also had the worst day since November 2011, while Nasdaq posted the worst finish since December 2011.

European stocks slumped more than 2%.

First-quarter earnings: They won’t be pretty

Yields on Spain’s 10-year bonds hovered just under 6%, the highest level in more than three months. Borrowing costs have been trending higher as the government struggles to push through budget cuts. In Italy, the yields rose near 5.7%.

Peter Boockvar, chief equity strategist at Miller Tabak, said that while U.S. investors had been largely ignoring sovereign debt questions in Europe, the continent’s problems cannot be ignored now.

As part of a broad retreat from risky assets, investors jumped into U.S. Treasuries, driving the yield on 10-year Treasuries below 2% for the first time in more than a month.

Twenty-nine of the Dow’s 30 components ended in the red, with Bank of America (, Fortune 500) leading the broad retreat. Oil and industrial stocks were also among the biggest decliners. GE (, Fortune 500), Caterpillar (, Fortune 500) and Exxon (, Fortune 500) fell more than 1%.

The so-called fear index, the VIX (), rose nearly 11% Tuesday and is up nearly 33% over the past five days. It’s at 20.5, still far from 30 — a reading that typically signals heightened investor fear.

Investors got one positive surprise after the markets closed. Dow component Alcoa (, Fortune 500) beat earnings estimates when it reported after the closing bell. Alcoa’s earnings unofficially begins the release of first-quarter financial results personal loan for poor credit.

Analysts are forecasting a 0.1% drop in first-quarter earnings for companies in the S&P 500 compared to a year earlier, according to FactSet. While that’s not a major decline, it would mark the end of a nine-quarter winning streak. Stocks were on a tear in the first three months of this year, with the Dow and S&P 500 enjoying their best first quarter in over a decade.

"We’re essentially expecting no growth, but we could see earnings come in worse than that," said Boockvar. "I think we have the potential for some disappointment."

Stocks finished lower Monday, as investors reacted to the disappointing March jobs report released last week.

World markets: European stocks closed down sharply. Britain’s FTSE-100 () slipped 2.2%, the DAX () in Germany dropped 2.5%, and France’s CAC 40 () shed 3.8%.

In Asia, Japan’s Nikkei () slipped 0.1%, while Hong Kong’s Hang Seng () lost 1.2% and the Shanghai Composite () gained 0.9%.

Economy: Wholesale inventories came in higher than expected for February with a 0.9% increase above the 0.5% rise forecast by economists. Inventories rose 0.4% in January.

On Monday, Federal Reserve chairman Ben Bernanke said in a speech in Georgia that banks need to increase their capital buffers in order to ensure stability in the financial system.

Companies: Shares of electronics retailer Best Buy (, Fortune 500) surged then dropped after the company announced that CEO Brian Dunn had resigned and the company would begin a search for a new CEO.

Sony () shares dropped after the electronics maker announced it expects an annual loss of more than double its previous projection. The company said the revision came after recording additional tax expenses, primarily in the United States.

Shares of grocery retailer Supervalu (, Fortune 500) were up 15%, after the company reported earnings that beat expectations and offered strong guidance.

Apple’s (, Fortune 500) shares hit another all-time high Tuesday.

Introducing Wall Street’s new rainmakers

Currencies and commodities: The dollar gained against the euro and the British pound but fell against the Japanese yen.

Oil for May delivery lost $1.32 to $101.14 a barrel.

Gold futures for April delivery gained $16.60 to $1,660.50 an ounce.  

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The era of low-priced energy that has shaped nearly every aspect of North American life for the past century, including the rise of the suburbs and beyond, may be ending.

Energy price spikes have come and gone, but there is evidence that suggests the latest one could be the leading edge of something bigger. There may still be plenty of oil and gas to be found, but supplies of low-cost, easily accessible reserves are dwindling. This is sending exploration into more dangerous and ever more expensive places to keep up with demand, pushing up the cost of exploration and the price of fuel. At the same time, fast-developing economies in China, India, Brazil and elsewhere want their share of the energy pie to grow.

These reasons may help explain why, with Europe in recession and the United States in a weak recovery, oil is trading at more than $100 a barrel and gasoline is above $1.30 a litre in Toronto. It may hit $1.50 by summer and signs are that, over time, it will stay there. Former CIBC economist Jeff Rubin, for one, predicted in his 2009 book Why Your World Is About to Get a Whole Lot Smaller, that $2-a-litre gas isn

Egypt’s Islamist-dominated parliament called on Sunday for a vote on stopping U.S. aid, but it is unlikely that such a move would oblige the nation’s military rulers to ask Washington to halt $1.5 billion in American aid this year.

The move by the People’s Assembly was sparked by the March 1 departure of six American defendants in a case of 43 employees of nonprofit groups accused of using illegal foreign funds to foment unrest in Egypt. The 43 include 16 Americans, nine of whom were already outside the country when the case was referred to trial. One opted to stay behind and face the trial.

The rest of the 43 are mostly Egyptians, Jordanians, Palestinians and Germans.

The U.S. threatened to cut off aid to Egypt over the issue, but the departure of the six partially eased the crisis, the worst between the two allies in 30 years.

Even if the 508-seat chamber voted to reject U.S. aid, such a move could amount to a symbolic gesture given the wide powers enjoyed by the generals, who collectively act as the presidency, and the likelihood of them approving it in the name of national interest.

The exit of the American defendants, however, kicked off a storm in Egypt, prompting many to accuse the ruling generals of bowing to U.S. pressure and intervening in the work of the judiciary. Egypt’s military has benefited the most from the nation’s close ties with the United States. It is due to get $1.3 billion in aid this year. U.S. economic assistance for 2012 is about $250 million.

In Sunday’s session, lawmakers complained the U.S. had no respect for Egypt’s sovereignty and called for a vote on a no-confidence motion in the military-backed government check cash advance. The move against the government came after four Cabinet ministers briefed the chamber on the case. Lawmakers constantly interrupted their testimonies.

Several lawmakers later said it was the generals and not the government that must be questioned about the nation’s “humiliation” by the United States over the case. The generals have said they had nothing to do with the Americans’ departure and that the entire affair was in the hands of the judiciary. However, the judge who presided over the trial’s opening hearing on Feb. 26 excused himself late last month, citing uneasiness.

Judge Mahmoud Mohammed Shoukri later said in comments to the media that he quit to protest political meddling in the case, which is now being tried by another court, also in Cairo.

“I wish members of the U.S. Congress could listen to you now to realize that this is the parliament of the revolution which does not allow a breach of the nation’s sovereignty or interference in its affairs,” Parliament Speaker Saad el-Katatni, an Islamist from the chamber’s largest party, told lawmakers.

Suggesting that a crisis was looming between the legislature and the Cabinet, el-Katatni adjourned the session until Monday after a two-hour break. He said Cabinet ministers scheduled to answer lawmakers’ questions failed to show up.

“It seems that the government is pushing for a crisis with parliament,” el-Katatni said.

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Employers probably added more than 200,000 workers for a third straight month in February amid optimism about the U.S. expansion, economists said before a report this week.

Payrolls increased by 210,000 last month after rising 243,000 in January, the most in nine months, and 203,000 at the end of 2011, according to the median projection of 55 economists surveyed by Bloomberg News. It would mark the strongest three- month stretch in almost a year. The jobless rate probably held at an almost three-year low of 8.3 percent.

Bigger employment and wage gains would go further in bolstering household spending, which accounts for about 70 percent of the economy and is threatened by higher fuel costs. Federal Reserve Chairman Ben S. Bernanke said last week that while the labor market is making progress restoring the 8.7 million jobs lost as a result of the recession, it

Euro-area finance ministers are set to clear a second rescue for Greece today to avoid what Italian Prime Minister Mario Monti described as a potential

Japanese Finance Minister Jun Azumi said his nation and China will work together to help Europe solve its debt crisis through the International Monetary Fund.

Europe needs a bigger so-called firewall of added funding to contain the crisis, even as Greece shows some improvement in solving its financial woes, Azumi told reporters in Beijing yesterday after meeting Chinese Vice Premier Wang Qishan. Azumi, who met Chinese Finance Minister Xiu Xuren during his visit, also said he asked China to make its currency more flexible.