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Nasdaq ends 1.8% lower as tech selloff weighs on US stocks

Mar 20 2018 07:05

New York - Shares of big technology companies tumbled on Monday following a Facebook data breach scandal, pushing US equity markets sharply lower.

The tech-rich Nasdaq Composite Index dropped 1.8% to close at 7 344.24.

The Dow Jones Industrial Average shed 1.4% to end the day at 24 610.91 and the broad-based S&P 500 also fell 1.4% to 2 712.92.

Facebook itself suffered the biggest hit, diving 6.8% following reports that Cambridge Analytica, the data analysis firm hired by Donald Trump's 2016 presidential campaign, stole information from 50 million Facebook user profiles to help design software to predict and influence voters' choices.

But other large technology names, including Amazon, Apple, Google parent Alphabet and Netflix lost around 1.5% or more on worries that additional scrutiny could result in regulations that crimp growth at many of the stock market's leading lights.

"What this has done has sparked a conversation that will probably affect quite a few of these tech names," said Shawn Cruz, manager of trader strategy at TD Ameritrade.

"If there's any sort of changes or regulation that comes out of this, it'll be applied across the board to all these companies that are using data."
The tech pullback prompted broad-based selling with virtually the entire Dow finishing in the red. Leading industrial companies such as Caterpillar and DowDuPont lost more than 2%.

Analysts said other events this week are also encouraging investor caution, including a Federal Reserve monetary policy decision on Wednesday and a G20 meeting of finance ministers in Argentina that could bring to the surface rising tensions on international trade.

Information technology company CSRA rose 0.9% after receiving an solicited offer from CACI International. CSRA, which previously reached an agreement to be acquired by General Dynamics for $9.6bn, said it would review the CACI offer.

CACI dropped 7.5%, while General Dynamics advanced 0.5%.

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