Facebook loses $US35b after massive data breach, tech stocks lead Wall Street sell-off
BUSINESS

Facebook loses $US35b after massive data breach, tech stocks lead Wall Street sell-off

Offshore Technology International -
Facebook has had its worst trading day in five years, with about $US35 billion wiped off its total market value overnight.

The social media company's share price fell by 6.8 per cent, as its chief executive Mark Zuckerberg faces calls from US and European politicians to explain an enormous data breach.

Of particular interest is how political analytics firm Cambridge Analytica had harvested the private data of more than 50 million Facebook users without their consent to support Donald Trump's 2016 presidential election campaign.

The scrutiny presents a new threat to Facebook's reputation, which is already under attack over Russia's use of Facebook tools to sway American voters with 'fake news' posts before and after the 2016 US elections.

Facebook said on Monday it had hired digital forensics firm Stroz Friedberg to carry out a comprehensive audit of Cambridge Analytica, which had agreed to comply and to give the forensics firm complete access to their servers and systems.

Cambridge Analytica strongly denies the claims, according to a statement on its website.

'It's clear these platforms can't police themselves,' Democrat senator Amy Klobuchar tweeted.

On Monday, Republican senator John Kennedy joined Senator Klobuchar in calling on Mr Zuckerberg to testify before Congress, and Democratic senator Ron Wyden sent a letter to Mr Zuckerberg asking about company policies for sharing user data with third parties.

It was not clear whether Republicans who hold congressional committee gavels would announce hearings related to Facebook and Cambridge Analytica.

But the calls reflected mounting bipartisan concern in Washington over whether internet firms are fair trustees of the massive amounts of user data they collect.

Tech sector sinks, along with Wall Street
Facebook was the worst performing share on the S&P 500 overnight.

The sharp fall in Facebook's share price weighed heavily on the S&P technology sector, down 2.3 per cent, as well as the Nasdaq, off by 1.8 per cent.

Other major companies with large tech businesses also dropped as recent concerns over regulation in the arena increased.

Apple, Microsoft and Google shares fell sharply — by 1.5, 1.8 and 3.3 per cent respectively.

'Everyone knows that tech fundamentals are solid, but rumblings like what you are seeing today, that does sort of prompt people to think 'is this as good as it is going to get or should I take some profits here?' said Eric Freedman, chief investment officer for US Bank Wealth Management.

The S&P 500 fell by 1.4 per cent, while the Dow Jones fell by 1.4 per cent (336 points) to 24,611.

Selling was broad, with each of the 11 major S&P sectors in the red.

The CBOE Volatility index was up 5.48 points at 21.28, in one of its sharpest gains since the market sell-off in February.

Australian market today
Australian shares are expected to fall sharply in early trade, following negative leads from US markets.

The Australian dollar is steady at 77.2 US cents.

But it has fallen against the British pound (-0.6pc) and euro (-0.4pc), and New Zealand dollar (-0.3pc).

In economic news, the ABS will release its fourth-quarter house price index, and the Reserve Bank will release its meeting minutes from earlier this month.

You can write your opinion

No comment posted.