Stocks drop as Facebook leads rout in tech sector

Facebook stock plunged Monday to its worst loss in four years, leading a rout in technology companies that helped drag down the major U.S. stock indexes. The social media company’s stock fell following reports that Cambridge Analytica, a data mining firm working for the Trump campaign, improperly obtained data on 50 million Facebook users.

The drop in Facebook stock came after the New York Times and the Guardian reported that Cambridge Analytica was able to tap the profiles of more than 50 million Facebook users without their permission. Legislators in the U.S. and Europe criticized Facebook and said they want more information about what happened. Investors wondered if Facebook and other companies such as Alphabet will face tighter regulation as a result, and those companies’ stocks slid too.

Also on Monday, 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.

The Standard & Poor’s 500 index sank 1.4%, its biggest loss since Feb. 8, when it tumbled almost 4% on worries about inflation.

Larger technology companies including Apple and Microsoft fared worse than smaller ones. Another market favorite, Amazon, also dropped, and healthcare stocks fell more than the rest of the market.

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 this week. Britain is scheduled to officially leave the EU on March 29, 2019.

Facebook sank 6.8% to $172.56, its biggest one-day drop since March 2014.

Daniel Ives, chief strategy officer and head of technology research for GBH Insights, said Facebook said Wall Street is more concerned about the latest situation than it was about issues such as fake news spreading on Facebook’s platform. That’s because Cambridge Analytica reportedly got access to the personal data of a large number of users, and the backlash suggests Facebook may face more regulation and could lose users, advertisers or ad revenue.

He estimated that $5 billion in annual revenue for Facebook might be at risk and said the situation could create problems for other tech companies, especially Alphabet’s YouTube unit and Twitter. Alphabet fell 3% to $1,100.07. Twitter fell 1.7% to $34.98.

Twenty-nine of the 30 Dow stocks finished the day with losses. The only exception was Boeing.

Universal Display dived 12.1% to $109 after Bloomberg News reported that Apple is designing and making display screens and may stop buying them from other companies.

Bond prices gave up an early gain. The yield on the 10-year Treasury note stayed at 2.85%.

Benchmark U.S. crude fell 28 cents to $62.06 a barrel in New York. Brent crude, used to price international oils, fell 16 cents to $66.05 a barrel in London. Wholesale gasoline fell 2 cents to $1.92 a gallon. Heating oil stayed at $1.91 a gallon. Natural gas fell 4 cents to $2.65 per 1,000 cubic feet.

Gold rose $5.50 to $1,317.80 an ounce. Silver rose 5 cents to $16.33 an ounce. Copper fell 2 cents to $3.08 a pound.

The dollar fell to 105.97 yen from 106.10 yen. The euro rose to $1.2357 from $1.2284.