Morning Business Memo:
A Facebook fiasco for Nasdaq. The chief executive of the Nasdaq stock market admits he was “embarrassed” by what happened on Friday when trading glitches led to doubts about the market’s ability to handle hot IPOs. Nasdaq not only delayed the start of trading in Facebook by a half hour, but there were technical problems throughout the day.
The Financial Times says the exchange is “in talks with regulators over potentially millions of dollars of customer claims.” Technical problems left investors with orders that were improperly processed. The cause was said to be a malfunction in the trading system that processes order cancellations. Friday’s session saw about 570 million Facebook shares changing hands, the largest ever for an IPO. Nasdaq officials insist the trading problems didn’t have any impact on Facebook’s stock price.
Germany’s hard-line Chancellor Angela Merkel is coming under new pressure to give ground in Europe’s austerity vs. growth debate. The G8 economic summit meeting ended over the weekend with a message that says growth is a priority. Germany has resisted calls to provide more European backing for banks and government bonds. Signs of a slow-motion bank run in several of the weaker eurozone economies are a big headache for the region’s leaders. More crisis meetings are being held this week.
Struggling Internet firm Yahoo has grabbed a lifeline. The Chinese e-commerce group Alibaba has agreed to buy back half of Yahoo’s stake in the company for more than $7 billion. The deal will enable Yahoo to return cash to unhappy shareholders who have been angered by the sharp drop in their shares.
New clues on the strength – or weakness – of the US recovery come this week with the release of two new reports on homes sales and a survey on durable goods orders.
Richard Davies Business Correspondent ABC NEWS Radio