Shares of Facebook (Nasdaq: FB), the No. 1 social network, jumped 5 percent in late Thursday trading after they set a new low of $26.83.

In the last hour of trading, Facebook rose $1.41 to $29.60 on volume exceeding 98 million shares. They closed Wednesday at $28.19.

Earlier, the Menlo Park, Calif-based website won two separate "buy" recommendations from Wall Street banks that didn't participate in its $16 billion initial public offering two weeks ago.

After the close, James Gorman, CEO of Facebook's lead underwriter, Morgan Stanley (NYSE: MS) appeared on CNBC where he denied "any nefarious activity" had taken place both before and after the May 17 initial public offering.

"There was very high retail interest," Gorman said, which accounted for the IPO pricing at $38. "People were calling in from all over the country, all over the world."

Insiders weren't given information that Facebook's earnings growth would slip, the CEO said. "Absolutely not," Gorman insisted. He said filings with the U.S. Securities and Exchange Commission that reported the company's slide in first-quarter net income was sufficient.

Morgan Stanley's Internet analyst did speak to clients but "that is standard operating procedure," he said, fully permitted by the SEC.

Meanwhile, Gorman said he welcomed probes into the deal by the SEC, other regulators and the U.S. Congress. "The journey is not over," he said.

Earlier, analyst Martin Pachter at Wedbush Securities rated the Menlo Park, Calif., company "outperform" with a 12-month target of $44. He said Facebook's long-term revenue growth will be "dramatic." Topeka Capital's Victor Anthony issued a "buy" call with a $40 target.

Shares of Morgan Stanley rose 27 cents to $13.36.

Thursday's gain boosted Facebook's market value to $63.4 billion, still 39 percent below its value at the IPO.

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