BREAKING NEWS Butte County Sheriff's Office confirms man hit by train was killed Full Story
STREAMING NOW: Watch Now

Dow drops 336 points as Facebook plunges

Facebook is on track for its worst day in more than five years, and it's dragging the stock market down with it....

Posted: Mar 19, 2018 10:09 PM
Updated: Mar 19, 2018 10:09 PM

Facebook is on track for its worst day in more than five years, and it's dragging the stock market down with it.

The Dow fell as much as 493 points on Monday and is in negative territory for the year. Facebook tumbled 7%, helping to pull the S&P 500 down 1.7% and the Nasdaq 2.2%.

Big tech companies, including Facebook, Amazon, Netflix and Google, have helped contribute to the market's climb, but all four dropped Monday. The S&P's tech sector fell 2.9%. It was the worst performing sector on the index.

Facebook is under pressure from lawmakers in both the United States and the UK after more than 50 million users' data ended up in the wrong hands.

Related: Facebook is facing an existential crisis

"When you have real damage to a large enough company, that translates into the indexes as a whole," Brad McMillan, chief investment officer at Commonwealth Financial Network, said.

Democratic Senator Amy Klobuchar has called on Zuckerberg to appear before Congress to testify about "what Facebook knew about misusing data from 50 million Americans in order to target political advertising and manipulate voters." John Kennedy, a Republican senator from Louisiana, joined Klobuchar in calling for Zuckerberg to testify.

Related: Why nobody can tell Mark Zuckerberg what to do at Facebook

Investors worry that new regulations on Facebook or an exodus of users from the platform could slow down one of the world's most valuable companies and chill the tech sector's rise.

"Investors are questioning [Facebook's] growth potential. As a result, they are willing to take profits," said Sam Stovall, chief investment strategist at CFRA Research.

Wall Street is also weighing President Trump's next move on trade with China and the first Federal Reserve meeting with Chairman Jay Powell at the helm beginning Wednesday.

The White House confirmed to CNN last week that the administration is considering tariffs on at least $30 billion worth of imports from China. The move would be retaliation for alleged Chinese technology intellectual property theft. Trump has already imposed tariffs on steel and aluminum, setting off fears of retaliation by US trading partners and a wider trade fight.

Related: Major retailers to Trump: New China tariffs will hurt American shoppers

On Monday, 49 of the nation's largest retailers, including Walmart, Target and Costco, said new tariffs would hurt consumers.

"As you continue to investigate harmful technology and intellectual property practices, we ask that any remedy carefully consider the impact on consumer prices," the letter stated.

Investors are also preparing for the Fed to raise rates when it meets Wednesday for a two-day policy conference. CME Group predicts a 94% chance the Fed hikes rates by a quarter percentage point.

Related: Trump spending spree may speed up the Fed

"We have a lot more uncertainty with respect to the Fed than we've had in years," McMillan said. "Everyone believes Chair Powell is similar to Chair Yellen, but we don't really know."

McMillan argued the Fed's path to gradually normalize interest rates, which have been at historical lows since the 2008 financial crisis, is a sign of the economy's strength.

"This is essentially the Fed endorsing the fact that the market is growing. I think the market reaction ultimately would end up being positive."

Stovall of CFRA Research is projecting the Fed will raise interest rates three times in 2018, but investors have left open the possibility of a fourth. Higher interest rates bring down the value of stocks by making borrowing costs higher for companies. As rates climb higher, returns in the bond market can also look more attractive than riskier stocks.

-CNNMoney's Matt Egan contributed to this story.

California Coronavirus Cases

Data is updated nightly.

Cases: 3074812

Reported Deaths: 35060
CountyCasesDeaths
Los Angeles103873814416
San Bernardino2569141560
Riverside2510002676
San Diego2185552174
Orange2165092508
Santa Clara949051129
Kern87240572
Fresno83200968
Sacramento811831128
Alameda68649788
Ventura62774462
San Joaquin58843788
Contra Costa53349460
Stanislaus43121766
Tulare42186515
Monterey36464255
San Mateo32887309
San Francisco29502266
Solano25983107
Santa Barbara25405243
Imperial25333474
Merced24570316
Sonoma24184242
Kings19588148
Placer17490184
San Luis Obispo16056140
Madera13528151
Santa Cruz12461113
Marin11732159
Yolo10789138
Shasta9750123
Butte9528128
El Dorado788649
Sutter782879
Napa767244
Lassen519916
San Benito500346
Yuba499627
Tehama433244
Tuolumne340340
Nevada323474
Mendocino319232
Amador302431
Lake262531
Humboldt242725
Glenn194820
Colusa17969
Calaveras162123
Siskiyou145713
Mono11244
Inyo98329
Del Norte8672
Plumas5895
Modoc3853
Mariposa3464
Trinity3044
Sierra820
Alpine730
Unassigned00
Chico
Clear
36° wxIcon
Hi: 62° Lo: 36°
Feels Like: 36°
Oroville
Clear
40° wxIcon
Hi: 63° Lo: 47°
Feels Like: 40°
Chico
Clear
36° wxIcon
Hi: 57° Lo: 44°
Feels Like: 36°
Red Bluff
Clear
36° wxIcon
Hi: 45° Lo: 17°
Feels Like: 30°
Red Bluff
Clear
36° wxIcon
Hi: 60° Lo: 37°
Feels Like: 30°
Chico
Clear
36° wxIcon
Hi: 62° Lo: 34°
Feels Like: 36°
We'll be staying dry today, but clouds will be increasing. Temperatures will be cooler today. We'll have even cooler temperatures, rain, and snow on the way in your Friday forecast. Heavier rain and snow are projected late this weekend and next week.
KHSL Severe
KHSL Radar
KHSL Temperatures

Community Events