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Mar 22, 2018

CNBC | Dow opens more than 250 points lower, Facebook drags tech lower

cnbc.com

Dow slides more than 200 points as trade fears and tech troubles pressure stocks

Fred Imbert, Alexandra Gibbs

U.S. stocks opened sharply lower on Thursday as a decline in Facebook shares pressured the broader technology sector. Stocks were also pressured by worries of a potential trade war.
The Dow Jones industrial average pulled back 228 points. The S&P 500 declined 0.9 percent, with tech dropping 1 percent. The Nasdaq composite fell 1 percent.
Facebook dropped more than 2 percent after CEO Mark Zuckerberg broke his silence over news that data research firm Cambridge Analytica gathered data from 50 million Facebook profiles without the permission of its users.
In an interview with CNN, Zuckerberg said it had been "a major breach of trust, and I'm really sorry that this happened." Shares of Facebook have been under pressure all week, sliding 8.5 percent through Wednesday's close.
Traders work on the floor of the New York Stock Exchange Friday morning on Feb. 9, 2018 in New York City. Spencer Platt | Getty Images
Traders work on the floor of the New York Stock Exchange Friday morning on Feb. 9, 2018 in New York City.
The PowerShares QQQ Trust (QQQ), which tracks the tech-heavy Nasdaq 100 index, dropped 1.4 percent, breaking below its 50-day moving average, a key technical level.
"Up until last week, the Tech sector had been a workhorse, leading the stock market higher," Ed Yardeni, president and chief investment strategist at Yardeni Research, said in a note Thursday. " Since the Tech sector peaked on March 12, the picture is bleaker."
"That said, the declines over roughly the past week are a drop in the bucket compared to the gains over the past year," Yardeni added. "Our hunch is that while Facebook may need to spend more on lobbying and complying with regulations, consumers won't drop their Facebook habit in the wake of this week's revelations because no one assumes that their Facebook postings are private."
Stocks were also pressured as the Trump administration was set to announce later on Thursday tariffs designed to punish China for intellectual property theft. Some reports indicate the administration will slap $50 billion in tariffs to Chinese goods.
Equities have been under pressure recently as the Trump administration ramps up a protectionist trade agenda. Earlier this month, President Donald Trump announced the implementation of tariffs on steel and aluminum imports, raising concerns about a potential trade war.
Investors also digested the U.S. Federal Reserve's latest monetary policy decision. As widely expected by the markets, the Fed raised interest rates by 25 basis points on Wednesday and upgraded its economic outlook, saying that economic activity and jobs gains had been strong in recent months.
Market watchers expect the central bank to hike three times in 2018, while the Fed announced that it was increasing its rate-hike forecast for 2019. Following the announcement, Treasury yields rose with the benchmark 10-year yield briefly topping 2.9 percent, but gave back those gains on Thursday.
—CNBC's Jeff Cox contributed to this report