Facebook drags technology companies down as stocks slide
Facebook’s stock plunged 6.8 percent Monday, its worst loss in four years, leading a rout among technology companies. The social media company’s stock fell following reports a data-mining firm that worked for the Trump campaign improperly obtained data on 50 million Facebook users.
The New York Times and the Guardian reported that the firm, Cambridge Analytica, tapped the profiles of more than 50 million Facebook users without their permission. US and European lawmakers criticized Facebook and said they want more information about what happened. Investors wondered if companies like Facebook and Alphabet will now face tighter regulation.
Daniel Ives, head of technology research for GBH Insights, said Facebook is in crisis and will have to work hard to reassure users, investors, and governments.
‘‘This is a defining moment for them,’’ he said. ‘‘It either becomes a blip on the radar and it helps the platform mature . . . or it becomes the start of something broader.’’
Elsewhere, the British pound rose and European stocks slumped after Britain and the European Union said they are getting closer to a deal that will complete Britain’s departure from the EU in March 2019.
Representatives of Britain and the European Union said they made progress on the terms of Britain’s departure from the bloc. British envoy David Davis said important steps have been made in the last few days and he thinks EU leaders will back them in a meeting Thursday and Friday.
The pound rose to $1.4050 from $1.3938. The British FTSE 100 index fell 1.7 percent, and Germany’s DAX fell 1.4 percent. France’s CAC-40 was 1.1 percent lower.
The S&P 500 index shed 1.4 percent, to 2,712.92. The benchmark took its biggest loss since Feb. 8, when it tumbled almost 4 percent as investors worried that inflation would slow the market and the US economy.
The Dow Jones industrial average fell 1.3 percent, to 24,610.91. During the day it fell as much as 493 points. The Nasdaq Composite gave up 1.8 percent, to 7,344.24. The Russell 2000 index of smaller-company stocks declined 1 percent, to 1,570.56.
Larger technology companies including Apple and Microsoft fared worse than smaller ones. Another market favorite, Amazon, also dropped, and health care stocks fell more than the rest of the market.
Facebook said late Friday that it had suspended Cambridge Analytica and its parent company. It said Cambridge obtained data from 270,000 people who downloaded a purported research app that was described as a personality test. A former employee said Cambridge was able to get data from tens of millions of other users who were friends with the people who downloaded that app.
Twenty-nine of the 30 Dow stocks finished the day with losses. The only exception was airplane maker Boeing, which rose 0.6 percent.
Bond prices gave up an early gain. The yield on the 10-year Treasury note remained at 2.85 percent.
Benchmark US crude fell 28 cents to $62.06 a barrel in New York. Brent crude, used to price international oils, lost 16 cents to $66.05 in London.