Brendan Mcdermid / Reuters

Commuters pass by the Nasdaq Marketsite in New York.

Shares of Facebook continued to slide Tuesday, even as the broader market managed a modest gain, as fallout from the company's IPO last week continued.

The social network’s share price was lately down 3 percent, adding to a decline of 11 percent seen in Monday's session. Facebook is now down 27 percent from Friday's intra-day high of $45 a share. (Track Facebook's stock price here.)

Facebook's market debut on Friday was beset by problems, so much so that Nasdaq said on Monday it was changing its IPO procedures. That may comfort companies considering a listing, but it does little for Facebook, whose lead underwriter Morgan Stanley had to step in and defend the $38 offering price on the open market. 

Facebook, its investment bankers and the Nasdaq market have come under fire for not making sure one of the most anticipated market offerings in recent memory happened smoothly.

When a stock falls below its offer price so soon after an IPO it is considered a disappointment for the company, particularly when the IPO is the most heavily traded ever and concerns such a high profile company.

A number of reasons for the stock decline have been offered by observers. Some pointed to underwriters offering too many shares, while others blamed an overly strong IPO price and worries about slowing revenue growth at the social network.

Also, Reuters reports that Facebook’s lead underwriters -- Morgan Stanley, JPMorgan and Goldman Sachs -- cut their revenue forecasts for the company in the run-up to the company’s $16 billion IPO.

Related: Blame game begins after Facebook debacle

The broader market was edging higher Tuesday amid news that Japan's sovereign rating was cut by Fitch as a political stalemate dimmed chances the country could curb its snowballing debt.

Fitch lowered Japan's long-term foreign currency rating to A plus from AA. It cut the local currency rating to A plus from AA minus. Both were cut with a negative outlook.

The United States and Japan are leading a fragile economic recovery among developed countries that could be blown off course if the euro zone fails to contain the damage from its problem debtor states, the OECD said on Tuesday.

Nasdaq OMX faces short-term costs from its botched handling of Facebook shares on their first day of trading on Friday, but longer-term repercussions could be more expensive as it struggles to restore its image.

Initially, the exchange said it planned to set aside $13 million to resolve bad trades; even if all of that was used, the cost would be minimal compared with the $387 million in net income it reported last year.

China will fast track approvals for infrastructure investment to combat a slowdown in the economy, a state-backed newspaper reported on Tuesday, underlining a call by Premier Wen Jiabao for policies to maintain growth.

Stocks rose more than 1 percent on Monday, with the S&P 500 snapping a six-day losing streak, as equities rebounded from their biggest weekly drop in almost six months.

Reuters contributed to this report.

NEW YORK -- JPMorgan Chase & Co CEO Jamie Dimon took another step that showed humility and caution in the wake of a stunning $2 billion loss, or more, on derivatives by announcing on Monday that the company will quit spending capital on stock buybacks. 

The company will suspend for now a $15 billion share repurchase plan that Federal Reserve regulators had just approved in March after running stress tests on the bank's capital, Dimon said at an investor conference.

The move will give JPMorgan added protection against having to reduce its quarterly dividend of 30 cents a share, which Dimon said the bank will maintain. It also gives Dimon a hedge against the long-shot chance that the bank's cash payouts might equal its reported earnings in a quarter.

Dimon's latest move reflects his strategy of handling the embarrassment from the loss by trying to get ahead of criticism.

"By getting ahead of the issue, JPMorgan is reducing the pressure on Capitol Hill for more severe responses, such as cutting the dividend," said Jaret Seiberg, a senior policy analyst in Washington for Guggenheim Securities.

"The further ahead you can get, the more you can mitigate the response and I think that is what we are seeing at play," said Seiberg.

When JPMorgan disclosed the losses on May 10, Dimon called the bank's handling of the credit derivatives portfolio "stupid" and said "egregious mistakes" were made with the trades.

JPMorgan shares fell as much as 3.6 percent after Dimon began speaking as the market opened. The shares were down 3.2 percent at $32.43 in afternoon trading in New York.

Dimon normally relishes the chance to buy back shares at prices below $45, he said in early April in his annual letter to shareholders. Paying prices that are lower than what he believes is the company's true value increases the value of remaining shares held by investors, he explained. He complained last fall that regulators would not allow the bank to buy back more stock at low prices under a prior capital plan.

But without suspending the current repurchases, or booking gains on asset sales to offset the derivatives losses, JPMorgan would have run a heightened risk of paying out as much cash for shares and dividends as it reports in profits in a quarter.

That would have looked bad at a time when regulators want banks to continue building up capital to become safer.

The company has already paid out $2.1 billion this quarter,$1 billion for buybacks and $1.1 billion for dividends, according to Morgan Stanley analyst Betsy Graseck's calculations.

That would be as much as net earnings if the loss from the derivatives trade reaches $5 billion, before taxes, by end the of June, Graseck said.

Other analysts also have said the losses could reach $5 billion by year-end. Dimon has said the $2 billion in losses as of May 10 could rise another $1 billion or more.

Dimon said at Monday's conference that the bank is holding off on buybacks to make sure it stays on its planned "glide path" to reach rising capital requirements being imposed under so-called Basel 3 standards.

JPMorgan already had many ways to keep its reported profits above its payouts, Graseck said. She listed them in a report: selling assets to book gains, cutting costs, and drawing down on reserves already taken for bad loans.

Dimon said Monday the bank has made progress working down the losing trades. "We are going to wrestle the problem down," he said.

JPMorgan's stock has lost more than 20 percent, or $30 billion, of market value since the trading losses were announced.

Dimon said the bank intends to restart stock buybacks once it has replenished the lost capital. The bank is capitalized well enough to withstand the losses, analysts said. It had $190 billion of shareholder equity supporting $2.32 trillion in assets at the end of March.

The faulty portfolio was built of layers of supposedly offsetting bets with credit derivatives tied to corporate bonds, both investment grade and junk. A model for measuring risk in the portfolio was changed sometime during the first quarter. The change made the portfolio look less dangerous than it would have under an older risk model the bank had used for years. 

Below, Deutsche Bank analyst Matt O'Connor discusses the drama surrounding JPMorgan's trading loss and how to make money in the banking industry on CNBC.

Richard Drew / AP

A television reporter stands inside the Nasdaq MarketSite in New York as Facebook's shares fall.

The stock market rallied Monday, but Facebook’s shares sank in the first day of trading without the full support of the company's underwriters.

Facebook's market debut on Friday was beset by problems, so much so that Nasdaq said on Monday it was changing its IPO procedures. That may comfort companies considering a listing but does little for Facebook, whose lead underwriter Morgan Stanley had to step in and defend the $38 offering price on the open market.

Without that same level of defense, its shares fell 11 percent Monday from Friday's intra-day high of $45 a share, closing just below $34. (Track Facebook's stock price here.)

"At the moment it's not living up to the hype," Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago said, adding that some people may have decided to hang back and buy the stock on the declines.

"Look at the valuation on it. It might have said 'buy' to a few people, but boy it was awfully rich," he said.

The losses wiped some $19 billion off of the company's market capitalization -- not far from what Chief Executive Mark Zuckerberg was worth personally when the stock debuted.

Related: After Facebook IPO debacle, finger-pointing begins

Volume was again massive, with more than 96 million shares trading hands in the morning session alone, making it by far the most active stock on the U.S. market. Nearly 581 million shares were traded on Friday.

"One of the things that we are seeing in Facebook is a lot of emotional trading, in that over the weekend much of the media coverage was negative, and that could be weighing on investors' decisions to get out of the stock," said JJ Kinahan, TD Ameritrade's chief derivatives strategist.

The drop was so steep that circuit breakers kicked in a few minutes after the open to restrict short sales in the stock, according to a notice from Nasdaq.

Shares in other one-time Internet darlings fell in lockstep with Facebook on Monday, with Yelp, LinkedIn and Zynga all lower.

As Facebook fell, there was a long list of questions -- ranging from whether the underwriters priced the shares too high to how well prepared the Nasdaq was to handle the biggest Internet IPO ever -- and few immediate answers.

"It was just a poorly done deal and it just so happens to be the biggest deal ever for Nasdaq and they pooched it, that's the bottom line here," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

The broader market fared better. The Dow Jones industrial average close the day up 135 points.

Nasdaq said Monday morning the changes it was making would prevent a repeat of what happened Friday, when glitches prevented some traders from knowing for hours whether their trades had been completed.

Related: Trading expert on Facebook IPO debacle

The exchange also said it would implement procedures to accommodate orders that were not properly executed last week, which could ultimately lead to compensation for some investors.

"It doesn't instill confidence for clients. Talk about trying to convince them it isn't a casino," one Midwestern financial adviser told Reuters on Monday.

Separately, a source said Morgan Stanley's brokerage arm still had a "large number" of share orders from Friday that were not confirmed, which it was working to resolve.

A Facebook spokeswoman declined to comment on the share price issue.

But analysts said that after the initial frenzy, investors were quickly becoming cautious about the stock.

"Investors are increasingly aware of the risk embedded in the stock price. There are real concerns about growth and advertisers' frequent lack of certainty how best to use Facebook, along with rising costs and ongoing acquisition risk," said Brian Wieser at Pivotal Research Group, who has a $30 target on the stock.

"At $38, the stock is priced for perfection in a manner that implied that risks were negligible."

In earnings news, Lowe's Cos Inc, the world's second-largest home improvement chain, cut its fiscal-year earnings outlook and said demand slowed toward the end of the traditionally strong first quarter.

Yahoo shares rose after news that Chinese Internet entrepreneur Jack Ma is buying back up to half of a 40 percent stake in his Alibaba Group from Yahoo for $7.1 billion in a deal that moves the Chinese e-commerce leader closer to a public listing.

Reuters contributed to this report.

Brendan Mcdermid / Reuters

Monitors show the value of Facebook's stock Monday morning in New York.

Facebook stock's slide continued Monday, leaving some investors wondering about the outlook for the newly public social network.

Facebook's stock tumbled below its $38 IPO price on its second day of trading. By Monday afternoon the company’s share price was down 10 percent from Friday’s closing price of $38.23. (You can track the performance of Facebook’s stock price here.)

When a stock falls below its offer price so soon after an IPO it is considered a disappointment for the company, particularly when the IPO is the most heavily traded ever and concerns such a high profile company.

A number of reasons for the stock decline were offered by observers. Some pointed to underwriters offering too many shares, while others blamed an overly strong IPO price and worries about slowing revenue growth at the social network.

Investors and technology industry watchers are closely tracking the Menlo Park, Calif.-based company's shares. Facebook's initial public offering was one of the most anticipated ever and now serves as a bellwether for other social media companies.

“There must have been some sober second thoughts about this,” said Brian Wieser, an analyst at Pivotal Research Group who was first to come out with a “sell” rating on Facebook's stock on Friday.

Daniel Ernst, principal at Hudson Square Research, said he still thinks Facebook is “a fantastic company.”

“Fifty-three percent operating margins, 901 million users around the world. … They can provide detailed targeting to advertisers,” he told CNBC. He noted that many investors want to own Facebook’s stock, but for some the stock’s multiple -- a method for valuing companies and their stocks -- is too high.

“I really think we are in inning one of Facebook growth,” he said. “I really think Facebook has something; for me, it’s just a question of price.”

Related: Facebook drops below $38 IPO price

Facebook’s market debut Friday suffered some hiccups.

Initial trading on the Nasdaq was delayed for half an hour due to issues with some orders. The stock closed Friday just a few cents above where it priced Thursday night. Although many investors had hoped for a big first-day pop, Facebook's stock opened Friday at $42.05 and fluctuated between $45 and $38 throughout the day before closing at $38.23.

Underwriting banks reportedly had to step in and buy shares to avoid the embarrassment of seeing the stock close below its IPO price on the first day of trading.

Bob Greifeld, chief executive of the Nasdaq stock market, admitted Sunday that technical issues had tarnished Facebook’s debut as a public company but argued that the technical glitches had not had an impact on the performance of the shares.

Thomas M. Joyce, chairman and chief executive officer of trading firm Knight Capital Group, appeared on CNBC Monday to dissect Facebook’s first-day IPO flop Friday, and he laid the blame at Nasdaq’s door.

“This is arguably the worst performance by an exchange on an IPO -- ever,” said Thomas M. Joyce, chairman and chief executive officer of trading firm Knight Capital Group. "The failure was Nasdaq’s.”

Joyce argued that the Nasdaq snafu hurt the stock price.

“This was simply a technology problem,” Joyce told CNBC. “This was like your server going down, except on a massive scale. And instead of stepping back and rebooting, they kept plowing ahead.”

Wedbush analyst Michael Pachter, who came out with an "Outperform" rating on Facebook before its IPO, said investment banks that arranged the offering overestimated the demand.

Last week the bankers, led by Morgan Stanley, increased the offering price range. On Wednesday, the size of the offering was increased. Both moves appeared to signal strong demand for the shares.

Related: Nasdaq ‘embarrassed’ about Facebook delay

“The late addition of 84 million shares to the offering overwhelmed demand, limiting the first day price,” Pachter said in a note to investors.

Deutsche Bank’s Brad Miller, an expert on pricing IPOs, said the trading glitch was due in part to the fact that it was difficult to find a comparable company, or a competitor, to use when valuing the company.

Most IPOs value companies at well below $25 billion, compared with more than $100 billion for facebook when it went public.

“It does create a bit of an issue,” he said on CNBC.

Miller said Facebook’s lackluster performance might make investors wary of investing in future IPOs.

“Investors may take a pause after how the Facebook transaction has traded,” he said, adding that market volatility is also an issue.

“April was the worst month in terms of money flows since 1984, and May is trending in that direction, so we need a turnaround in volatility,” he said. “I think we are going to take a pause here in the new issue market (until we see the) macro issues subside.”

The Associated Press contributed to this report.

Normally, a big decline would set up Wall Street for a technical rebound. But that may not be the case next week, even after the market posted its worst weekly loss for the year and the S&P fell for six straight sessions.

With the corporate earnings season drawing to an end and recent U.S. economic data raising doubts about the pace of growth, the S&P 500, which is down 7.3 percent so far in May, could decline further next week as concerns about the financial health of Europe persist.

"What has changed in the world since April? We went from hearing a constant refrain that the world is awash in money and markets must go higher to hearing nobody wants to take any risk. ... all in a week," said Peter Cecchini, global head of institutional equity derivatives at Cantor Fitzgerald & Co. in New York.

The S&P 500 fell 4.3 percent for the week, its steepest weekly decline this year, and closed below 1,300 for the first time in four months.

The hotly awaited market debut of Facebook on Friday was marred by technology glitches on the Nasdaq in sending messages back to the brokerages that handled orders of Facebook Inc. for individual, or "retail," investors. Those problems rekindled fears about the market's electronic trading system and caused some investors to stay away from equities.

Weighing on sentiment is a growing sense among investors that the euro zone debt crisis is nearing new heights, fueled by fears of the potential for a Greek euro exit and the deteriorating health of the Spanish banking system.

Solid corporate earnings and upbeat U.S. economic indicators had fueled the rally in U.S. stocks, offsetting jitters over Europe. But with earnings almost out of the way and data starting to disappoint, investors have shifted their focus back to headlines out of Europe.

Leaders of the Group of 8 major industrial economies meet this weekend to try to tackle the financial crisis in Europe. U.S. President Barack Obama, the G8 host, has repeatedly urged European leaders to do more to stimulate growth, fearing contagion from the euro crisis that could hurt the U.S. economy and his chances of re-election in November.

"The market is extremely oversold. Nonetheless, all major indicators remain on sell signals," said Larry McMillan, president of options research firm McMillan Analysis Corp, in a report on Friday.

"We expect a powerful but short-lived rally should be coming soon. But at this point, barring some major shifts in our indicators, it may only be a rally in a larger down-trending market," McMillian said.

Facebook, the No. 1 online social network, disappointed investors with a tepid market debut on Friday. Shares rose a scant 0.6 percent - nowhere near expectations for double-digit gains on the first trading day - and the day was marred by technical problems due to huge order volume. The stock closed at $38.23 after falling as low as $38, its initial offer price.

The disappointing debut curbed investors' appetite for other social media stocks. Hardest hit was Zynga, which closed down 13.4 percent to $7.16 after falling as low as $6.40. The stock was temporarily halted twice due to sudden declines.

LinkedIn shares fell 5.7 percent to $99.02, and Groupon fell 6.7 percent to $11.58. Zynga and Groupon, both of which went public late last year, are also trading below their IPO prices.

Despite the disappointing market debut and the weak performance of social media stocks, market participants are still optimistic about Facebook going forward.

"In any brand new area, social media in this case, most are going to be losers and only some are going to be winners. Yes, the IPO was disappointing, but Facebook is clearly the winner here and others aren't," said Randy Warren, chief investment strategist at Warren Financial Service.

Next week's economic data includes April's existing home sales on Tuesday at 10 a.m. Existing home sales are forecast at a 4.60 million-unit annual, up from 4.48 million in March.

New homes sales figures are due on Wednesday at 10 a.m. April's new home sales are also expected to post an increase, gaining about 7,000 units over a 328,000-unit annual rate in March.

Initial jobless claims and durable goods orders will be published on Thursday at 8:30 a.m. Consumer sentiment is due at 9:55 a.m. on Friday.

For the week, the Dow is off 3.5 percent, and the Nasdaq is down 5.3 percent.

Below, CNBC's Sue Herera looks ahead to what are likely to be next week's top business and financial stories.

Facebook via EPA

Facebook CEO Mark Zuckerberg rings the Nasdaq's opening bell from Menlo Park, Calif.

Updated at 4:00 p.m. ET: After jumping more than 10 percent at the start of trading, shares of Facebook pulled back in their market debut Friday, suggesting a cooler-than-expected reception for one of the most watched initial public offerings of stock of recent years.

Facebook’s stock jumped to $43 in initial trading, up about 13 percent from an IPO price of $38. But the stock quickly gave back some of its initial jump and fell as low as $38 in their first half hour of trading, at which point IPO underwriters stepped in to support its price, according to reports. Facebook’s share price eventually closed at just above $38.

The broader stock market was lower Friday, with social media stocks among the day’s biggest losers. Shares of LinkedIn, Pandora and Groupon were all lower.

Facebook’s opening trade was delayed. Its stock was originally due to begin trading on the Nasdaq stock market at 11 a.m. ET, but was delayed by about 30 minutes as traders experienced problems with changing and canceling orders they had submitted to the Nasdaq, The Wall Street Journal reported.

Despite the technical difficulties, retail demand for the Facebook offering was very strong, traders told CNBC, with an expected retail component of 15 percent to 25 percent. Trading volume in Facebook exceeded 100 million shares in the first three minutes of the stock’s trading, the Journal said.

Facebook’s market reception was unusual. Other recent big Internet IPOs have seen strong starts, including LinkedIn, which went public almost exactly a year ago at $45 a share and closed at $94 on a volatile first day of trading that saw its shares top $122 at one point.

Related: Want a piece of Facebook? Here's what you need to know

That means investors lucky enough to get in at the offering price were able to book an immediate paper profit of more than 100 percent or "flip" shares and cash in. Other investors paid as much as $122 a share for LinkedIn that day and were left with paper losses. (LinkedIn shares currently trade for about $100.) 

Groupon, another recent Internet IPO, leaped 27 percent on its opening day.

Earlier Friday, Facebook founder and CEO Mark Zuckerberg rang the opening bell for the Nasdaq stock market from Facebook’s headquarters in Menlo Park, Calif. Shares of Facebook are now trading on the Nasdaq under the symbol “FB.” (You can track the performance of Facebook’s stock price here).

Facebook went public after the close of trading Thursday at $38 a share, raising $16 billion in a landmark initial public offering that values the company at more than $100 billion.

Investment banks organizing the stock offering set the price at the top end of the range of $34 to $38 per share estimated by Facebook in a regulatory filing earlier this week.

At $38 a share, the offering values the eight-year-old company at $104 billion, making its IPO the largest-ever stock market debut for an Internet company. It will raise more than $16 billion for Facebook and selling shareholders, including Zuckerberg, and ultimately could raise up to $18.4 billion, assuming underwriters exercise their option for “overallotments” to meet strong demand.

Related: Facebook founder Zuckerberg opens trading at Nasdaq

Zuckerberg updated his profile on Facebook Friday morning, listing his company on the Nasdaq market.

Facebook has enjoyed remarkably swift growth. In just eight years the company has gone from a college service founded in a Harvard dorm to the third-largest public offering of stock in U.S. history, after stock offerings from General Motors and Visa.

The sky-high valuation of Facebook puts it a bit ahead of Web veteran Amazon.com, which has more than 10 times Facebook's $3.7 billion in revenue. But Facebook is growing quickly and posted $1 billion in profits last year, more than Amazon's $631 million.

The Associated Press contributed to this report.

When a world-renowned expert on initial public offerings has reservations about the upcoming Facebook IPO, it’s worth sitting up and taking notice.

Jay Ritter, Cordell Professor of Finance at the College of Business Administration at the University of Florida, appeared on CNBC Thursday morning to discuss his views on Friday’s much-anticipated stock offering from the social network.

“My concern with Facebook is that at the valuation that public market investors are going to be buying in at there’s very little upside potential left,” he told CNBC.

But, he added, it doesn’t necessarily follow that Facebook is overvalued.

“The bullish case for Facebook is, as Google has demonstrated, targeted search can be an extremely profitable business, and Facebook has that franchise with social networks and it’s a very defensible business model,” Ritter said.

Excitement for Facebook’s debut on the financial markets is high. So if you’re an individual investor, can you get a piece of the action, and should you?

The first thing to remember about IPOs is that they are not normally geared toward individual investors. Underwriting banks typically allocate IPO shares to their best clients, which include hedge funds, wealthy individuals and large institutional investors. These investors will get the right to buy a certain number of shares at the offering price, which Facebook set at $38 per share Thursday afternoon. (You can track the performance of Facebook’s stock price here).

Some smaller retail investors may get a few shares allocated, especially if they have a good relationship with a broker for one of the dozens of underwriting firms handling the transaction.

If you have not already been in touch with your broker, however, it is too late to even try get in at the offering price. The deadline to express interest was Tuesday afternoon at brokerages we checked with, and the deal reportedly is oversubscribed.

Your only option is to buy shares after they begin trading on the Nasdaq stock market, when the price will be set by the law of supply and demand.

“This is not a strategy for the faint of heart,” said Hugh Johnson, chief investment officer of Hugh Johnson Advisors in Albany, N.Y. Intense interest in Facebook’s offering is likely to drive the price up sharply as soon as trading begins, meaning the first public trade could be well above the offering price.

Related: Facebook set for stock market debut

In an example of the type of pressure investors could face, LinkedIn, another social media company, went public almost exactly a year ago at $45 a share and closed at $94 on a volatile first day of trading that saw its shares top $122 at one point.

That means investors lucky enough to get in at the offering price were able to book an immediate paper profit of more than 100 percent or "flip" shares and cash in. Other investors paid as much as $122 a share for LinkedIn that day and were left with paper losses. (LinkedIn shares currently trade for about $103.) 

Facebook could easily see a similar first-day trajectory, but it is impossible to know. Online investors who place a general order for Facebook stock will get shares at whatever price happens to be prevailing at the moment.

“Is it a sound investment for a sensible portfolio? No," said Johnson. "Is it a worthwhile speculative investment? Sure, but you have to be fully prepared for something that could be a very emotional event. And I have the sense that [the IPO price] could be very overvalued.”

One good piece of news about Facebook’s IPO is there are plenty of shares up for grabs.

In a sign of intense investor interest, Facebook said early investors in the company will be selling more of their shares in the IPO, bringing the total number of shares available to as many as 421.2 million, up from a previous maximum of 337.4 million.

Still, despite the increased number of shares on offer, the hype and interest surrounding Facebook’s IPO are precisely why investors should be cautious about investing in the company, said Professor Anant Sundaram of the Tuck School of Business at Dartmouth.

“My concern is the market is pricing [Facebook] to perfection … and the kind of fundamentals that are premised in that valuation, growth and revenues and cash flows, are simply astronomical,” he told CNBC Wednesday. “Now it’s possible they could achieve that, but I think the probability is low.”

Sundaram also says the fact that founder Mark Zuckerberg will control more than 50 percent of the company’s voting rights after it goes public is “very, very troubling.”

While a handful of new technology companies, such as Google, have thrived under the tight control of their founders, the stock ownership structure at Facebook limits the ability of shareholders to take action if things go wrong. He said evidence shows tightly controlled companies are more likely to wasteful acquisitions, overpay employees and spend unnecessarily on capital expenditures.

Other technology companies, such as Microsoft and Apple, have fared well without that sort of governance structure, Sundaram said. 

“Basically, as investors we are being asked to liquefy and validate a lot of insider wealth, and being told to sit and zip your lips in the peanut gallery,” he said.

While Facebook is expected to get a big opening-day “pop,” Kathleen Shelton Smith, co-founder and chairman of IPO research company Renaissance Capital says it’s more important to track what Facebook’s stock price will be a week or a month after its initial trading day.

“For an IPO to work it has to trade higher over time after the initial trading day, and not all of them do,” said Smith. “So the challenge for the underwriters is to price the IPO where it can move higher over time.”

“The question is, over time will the company deliver the kind of performance that justifies its price? Every investor studying this company wants to work that out.”

For individual investors, it is worth remembering that Facebook shares will be available on Nasdaq for the foreseeable future. Would-be investors can wait a day or two and buy shares when the price is less volatile.

For investors interested in IPOs, but unable to purchase them directly, Smith suggests investing in a mutual fund that track the IPO market, such as the Direxion Long/Short Global IPO Fund (ticker: DXIIX) or the Renaissance Global IPO Plus Aftermarket Fund (ticker: IPOSX).

Investing in these funds might even be a smarter play than buying Facebook shares directly. Sundaram said there are many reasons to expect Facebook shares to fall after their opening day.

He pointed to similar technology companies such as Zynga, which have seen their share prices fall after the expiration of "lockups" that prevent company insiders and major investors from selling for at least 90 days after a stock is first publicly traded.

If Facebook shares manage to hold their value “that would be a remarkable achievement in my book,” he said.

Related:

Mr. IPO: Facebook could be a dangerous bet

Goldman could make $1.09 billion in Facebook IPO

Goldman Sachs could be one of the biggest beneficiaries of the Facebook IPO on Friday.

The investment bank plans to cash out 43 percent of its 65.9 million shares it owns in the social network.

Facebook said Wednesday in a regulatory filing that its shares will be offered in a range of $34 to $38 each. At the high end of that valuation, the 28.7 million shares Goldman plans to sell, more than twice the amount initially planned, will bring the bank a cool $1.09 billion.

Other major Facebook shareholders, including hedge fund Tiger Global and Russian billionaire Yuri Milner, have increased the amount of shares they plan to sell in Friday’s IPO, which is expected to be completed late Thursday and begin trading on the Nasdaq Stock Market on Friday morning under the ticker symbol “FB.”

The IPO is expected to be the largest ever for an Internet company, surpassing Google’s 2004 offering, and it could be worth more than $12 billion at the top of its valuation range.

JPMorgan Chase reportedly has let go of the infamous "London Whale," Bruno Iksil, aka Voldemort, whose massive hedging bets led to a $2 billion loss which has reignited calls for more stringent controls on risky trading by banks.

The New York Times reported Wednesday that Iksil would be leaving the bank at an unspecified time. The newspaper attributed the news to unnamed current and former colleagues of Iksil.

If confirmed, Iksil would be another victim of the trading debacle at JPMorgan after the bank announced earlier this week that his boss, former Chief Investment Officer Ina Drew, resigned. Drew is being replaced by Matt Zames, who is the co-head of the bank's global fixed income unit.

Drew, 55, had worked for the bank for 30 years, rising to become one of Chairman and CEO Jamie Dimon's top lieutenants.

Two others are expected to step down: Achilles Macris, who headed the London-based team involved in the trade, and trader Javier Martin-Artajo. 

Joe Raedle / Getty Images

Protesters watch as cars leave outside the building where a JPMorgan Chase shareholders meeting was taking place on May 15, 2012 in Tampa, Fla.

It took less than an hour for JPMorgan Chase's CEO Jamie Dimon to dispatch a relatively tame group of shareholders at the bank’s annual meeting in Tampa on Tuesday.

That was the easy part.

Now, the bank’s combative CEO faces two government inquiries and a substantial legal liability from angry investors who have lost more than $20 billion after a series of risky bets inflicted at least $2 billion in losses on the nation’s largest – and once most-admired - bank.

On Tuesday, the New York office of the FBI opened an investigation into JPMorgan’s ill-fated trading scheme, a source familiar with the probe told Reuters. The source, who requested anonymity because the investigation is ongoing, said the probe was in a "preliminary" stage.

The investigation follows a separate inquiry by regulators at the Securities and Exchange Commission, first reported in early April, into JPMorgan's accounting practices. When JPMorgan reported its quarterly earnings on April 13, Dimon dismissed those reports as “a tempest in a teapot.”

Investigators will likely be looking into how well Dimon was briefed on the losses, which began mounting weeks before they were disclosed on May 10. Securities laws require public companies to disclose in a timely manner material information that could affect shareholders’ investments.

With some 850 million shares traded between April 13 and May 10, the bank faces “substantial liability" from shareholders who lost money based on Dimon’s initial assurances, according to Dennis Kelleher, a securities lawyer who heads a Better Markets, nonprofit shareholder advocacy group.

“This is supposed to be a well-managed bank with a CEO who sweats the details with a gold-plated risk management team,” he said. “The lawsuits will be a mile high by the time they’re all filed.”

Several hundred of those shareholders gathered Tuesday at a suburban office park in Tampa, Fla., under tight security that had been arranged for a protest that never really materialized. After rushing through his prepared remarks, Dimon listened patiently to series of mild scoldings.

"We heard the same refrain: We have learned from our mistakes. This will never be allowed to happen again," said Rev. Seamus Finn, representing shareholders from Missionary Oblates of Mary Immaculate. "I can't help wondering if you are listening."

Among the shareholder proposals under consideration was a provision to force Dimon to abandon his dual role as chairman and CEO. The move won only 40 percent approval despite the backing of large institutional investors such as the California Public Employees' Retirement System, which argued that a separate board chairman would provide stronger management oversight.

Some shareholders also pressed Dimon on the bank’s failure to provide greater assistance to families facing foreclosure,

“If Chase can afford to gamble with $2 billion without an impact on its bottom line, why can’t it reduce principal for borrowers. We’re talking about real people. They’re not just dollar signs,” Laura Johns, a former housing counselor, told Dimon at the annual meeting.

Dimon and JPMorgan face an even tougher round of questioning from Congress, regulators, federal prosecutors and shareholders.

On Monday, Sen. Tim Johnson, D-S.D., chairman of the Senate Banking Committee, announced hearings in the next few weeks on financial regulation that will include the JPMorgan loss. The hearings are expected to address the question of whether the loss-making trades were “hedges” against wider financial risk – or outright bets with depositors' and shareholders' money.

“Nobody actually knows what was going on because JPM has decided not to disclose what was going on,” said Kelleher. "So you basically have only speculation so far."

Until last week, Dimon had been an outspoken critic of new regulations aimed at restricting so-called proprietary trading that Congress has sought to outlaw since the financial collapse of 2008. He had led his industry’s effort to water down some provisions of the Dodd-Frank regulations enacted in 2009 to curb speculative trading.

The bank’s spectacular trading blunder – the final loss is still been tallied – has bolstered the case for tougher rules to prevent a repeat of the risky strategies that brought down the financial system in 2008. On Tuesday, U.S. Treasury Secretary Timothy Geithner said JPMorgan's losses strengthened the case for reform.

"The test of reform is not whether you can prevent banks from making mistakes ... the test of reform should be: Do those mistakes put at risk the broader economy, the financial system or the taxpayer?" Geithner said in Washington.

At Tuesday’s shareholders meeting, Dimon struck a more conciliatory tone on the subject of regulating the financial system,

“Our interest is the same as yours: to make it strong and sound,” he told shareholders. “We believe in strong simple good regulations. It’s not simply a question of more or less. We supported an awful lot of what is in Dodd-Frank."

Dimon also faces calls to resign as a member of the board of the New York Federal Reserve, one of JPMorgan’s chief regulators.

Having bankers on the boards of regional Fed banks “is a problem, period,” Sheila Bair, senior adviser at Pew Charitable Trusts and a former chairman of the Federal Deposit Insurance Corp. told Bloomberg news. “Why the regional banks have members of the industry that they regulate on their boards is beyond me.”

Stocks clung to minor gains Tuesday, in part driven by signs the U.S. economy is gathering steam.

Just after 1 p.m. Eastern, the Dow Jones Industrial Average was up 0.26 percent. The S&P 500 was 0.23 higher. And the Nasdaq rose 0.71 percent.

The markets wavered in early morning then returned to positive territory after a report saying major homebuilders were optimistic about the sector.

Consumer prices were flat in April, but the cost of gasoline dropped.

One sign of concern for the economy was a report showing retail sales barely rose in April.

Stocks are having their worst month in the past eight. For the month, the Dow is down 518 points — about 4 percent — after hitting a four-year high on May 1. The average is on track to post its first monthly loss since September, when it fell 6 percent.

If the Dow closes higher, it will be only its second up day since the peak reached on May 1.

The Associated Press contributed to this report.