NEW YORK (AP) – A sharp loss for Facebook is dragging technology companies lower Monday as U.S. stock indexes skid. The social media company is facing new criticism related to privacy issues following reports that a data mining firm working for the Trump campaign improperly obtained and then kept data on tens of millions of users. The stock is on pace for its biggest loss in four years.
Other stocks in technology, health care and retail are skidding as investors take some profits after the market’s gains over the last year. The British pound is rising and European stocks are down after Britain and the European Union said they are getting closer to a deal that will complete Britain’s departure from the EU.
KEEPING SCORE: The S&P 500 index sank 48 points, or 1.8 percent, to 2,703 as of 2:55 p.m. Eastern time. The benchmark index is on track for its biggest loss since Feb. 8, when it tumbled almost 4 percent as investors worried that rising inflation would slow the progress of the market and the U.S. economy. The Dow Jones industrial average fell 416 points, or 1.7 percent, to 24,529. The Nasdaq composite gave up 17 points, or 2.3 percent, to 7,311. The Russell 2000 index of smaller-company stocks declined 26 points, or 1.7 percent, to 1,559.
UNFRIENDED: Facebook said Friday that the data mining company Cambridge Analytica improperly obtained data on some of its users, and that it had suspended Cambridge while it investigates. Facebook said the company obtained data from 270,000 people who downloaded a purported research app that was described as a personality test.
The New York Times and the Guardian reported that Cambridge was able to tap the profiles of more than 50 million Facebook users without their permission. Facebook first learned of the breach more than two years ago but hadn’t disclosed it. A British legislator said Facebook had misled officials while Senator Amy Klobuchar of Minnesota said Facebook CEO Mark Zuckerberg should testify before the Senate Judiciary Committee.
Facebook sank $12.79, or 6.9 percent, to $172.30. That put the stock on pace for its biggest loss since March 2014.
Other technology companies also struggled. Microsoft slid $2.11, or 2.2 percent, to $92.49 and Apple fell $3.59, or 2 percent, to $174.43.
THE QUOTE: Daniel Ives, chief strategy officer and head of technology research for GBH Insights, said this is a crisis for Facebook, and it 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.”
Ives said Wall Street is more concerned about the latest situation than it was about issues like Facebook’s platform spreading fake news. That’s because Cambridge reportedly got access to the personal data of a large number of users, and the backlash suggests Facebook may face more regulation or could lose users, advertisers or advertising revenue.
He estimated that $5 billion in annual revenue for Facebook and said the situation could create problems for other tech companies, especially Twitter and Alphabet’s YouTube unit. Alphabet lost $39.26, or 3.5 percent, to $1,095.16 and Twitter slipped 61 cents, or 1.7 percent, to $34.97.