Sharechat Logo

While you were sleeping: Facebook sparks tech selloff

Tuesday 20th March 2018

Text too small?

Wall Street dropped as a plunge in Facebook shares led a decline in technology stock amid concern the industry could face an increase in regulation. 

Shares of Facebook sank, down 6.5 percent as of 1.41pm in New York, amid reports of misuse of its users’ data. 

“Tech companies all use data one way or the other as part of their businesses,” Shawn Cruz, senior trading specialist at TD Ameritrade in Chicago, told Reuters. “They are going to get a lot more scrutiny over what data they are collecting and how they are using it.”

In 1.45pm trading in New York, the Dow Jones Industrial Average dropped 1.6 percent, while the Nasdaq Composite Index gave up 2.3 percent. In 1.30pm trading, the Standard & Poor’s 500 Index retreated 1.9 percent.

Also weighing on sentiment were concerns about an accelerating pace of US interest rate increases, as well as the ongoing chaos in the Trump administration and its moves towards increased protectionism.

“If the Facebook news didn’t exist there would be all sorts of jitters here just given the Trump stuff,” Michael Purves, Weeden & Co’s chief global strategist, told Bloomberg. “If the regulatory clouds come on Facebook, certainly Google and Amazon will face increasing questions about their ability to generate outsized earnings growth if the regulators are going to be beating them.”

On Tuesday, the Federal Open Market Committee begins its first two-day policy meeting under Chair Jerome Powell. While US policy makers are widely expected to announce an interest rate increase on Wednesday, investors will look for any indications that they are looking to speed up their planned pace of hikes. 

The Dow dropped, led by declines in shares of Caterpillar and those of DowDuPoint, down 3.3 percent and 2.8 percent respectively. All 30 stocks in the Dow traded weaker as of early afternoon. 

US Treasuries rose, sending the yield on the 10-year note one basis point lower to 2.84 percent.

Shares of Apple fell 2.1 percent as of 1.37pm in New York. The company is designing and producing its own device displays for the first time, using a secret manufacturing facility near its California headquarters to make small numbers of the screens for testing purposes, according to people familiar with the situation, Bloomberg reported.

The technology giant is making a significant investment in the development of next-generation MicroLED screens, say the people, who requested anonymity to discuss internal planning, according to Bloomberg. 

In Europe, the Stoxx 600 Index declined 0.7 percent from the previous close. The UK’s FTSE 100 index shed 1.7 percent, Germany’s DAX Index fell 1.4 percent, while France’s CAC40 Index slid 1.1 percent.

The British pound climbed after the UK and the European Union reached agreement on the terms for the transition period immediately after Brexit. 

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares fall as investor uncertainty weighs on exporters; F&P Health, A2 drop
NZ dollar drops below US68c on plan to up bank capital
Noel Leeming fined $200,000 for misleading consumers
Big four banks face stiffer capital requirements from RBNZ
Infratil signals A$50m investment in Canberra Data Centres
Govt provides $2.5 mln to develop Opotiki aquaculture
Labour co-ordinator role may alleviate kiwifruit labour shortage
NZ manufacturing activity chugs along in November
Australia's GWA lobs in $118M bid for Methven
Govt leaves door open for higher emissions price cap

IRG See IRG research reports