After top executives from Facebook and Twitter faced a grilling in the U.S. Senate and reckoned with potential government regulation, investors gave the cold shoulder to their stocks and most of the tech sector.
Shares in Twitter, Snap and Facebook all declined significantly, dragging the Nasdaq down more than 1% to below the 8,000 level that prompted celebration barely a week ago. Major tech companies have been powering the ongoing bull market, leaving Wall Street with daily questions about when a pullback may be coming. The answer, for today, may have been found on Capitol Hill.
Twitter fell 6% to end the session at $32.17. Jack Dorsey, the company’s CEO, repeatedly conceded to the Senate Intelligence Committee that the company needed to improve its safeguards deterring misuse of the social media platform. The hearing also follows a series of tweets and comments, based on scant evidence, from President Donald Trump insisting that tech platforms are biased against conservatives.
Facebook, whose COO, Sheryl Sandberg told the committee about a range of new initiatives designed to restore public trust after a series of stumbles, saw its shares fall more than 2% to finish at $167.18.
Netflix also fell 6%, one of its sharpest declines of the year, but the selloff was unrelated to the Senate hearing. Some Wall Street analysts pointed to the streaming giant’s stock chart. As “chartists” in finance see it, patterns in a stock and movement above or below certain “support” levels can be tied to the volatility of shares. Such was the case today with Netflix, which closed at $341.18, well below the $423 high-water mark the stock reached in July.
Google parent, Alphabet, came in for a drubbing during the hearing because it declined to accept the committes’s invitation to testify. The company’s stock slipped nearly 1% to close at 1186.48. Amazon’s stock also got hit in abstentia, dropping 2% to slip below the $2,000-a-share barrier. Just yesterday, the company had reached $1 trillion in stock market value but the selloff took it down from that lofty perch. Microsoft fell almost 3% on the day, to $108.49.
Snapchat parent Snap Inc. plunged almost 5% to $10.11, briefly touching $10.06 to establish a new low stock price since its initial public offering in March 2017.
The Dow 30 ended the session in slightly positive territory, while the S&P was essentially flat.