Tech stocks tumble, as Facebook and Twitter grilled on US election meddling


Updated

September 06, 2018 08:41:04

Wall Street’s technology stocks tumbled sharply as the top executives of Twitter and Facebook were grilled by lawmakers about their efforts to combat foreign meddling with US elections.

Markets at 7:30am (AEST):

  • ASX SPI 200 -0.4pc at 6,190, ASX 200 (Wednesday’s close) -1pc at 6,293
  • AUD: 71.93 US cents, 55.68 British pence, 61.82 Euro cents, 80.2 Japanese yen, $NZ1.09
  • US: Dow Jones +0.1pc at 25,975, S&P 500 -0.3pc at 2,889, Nasdaq -1.2pc at 7,995
  • Europe: FTSE -1pc at 7,383, DAX -1.4pc at 12,040, CAC -1.5pc at 5,260, Euro Stoxx 50 -1.3pc at 3,316
  • Commodities: Brent crude -1.4pc at $US77.10/barrel, spot gold +0.4pc at $US1,196.61/ounce, iron ore +0.3pc at $US66.79/tonne

Testifying before the Senate Intelligence Committee were Twitter’s chief executive Jack Dorsey and Facebook’s chief operating officer Sheryl Sandberg.

Both of them faced threats of further regulation from sceptical politicians over their alleged failure to block fake accounts and slow the spread of disinformation.

Many senators expressed anger at Google for declining the committee’s request to send a senior executive to testify — the company was represented in the hearing room by an empty chair.

Republican Senator Marco Rubio said the company might have skipped the hearing because it was “arrogant”.

Ms Sandberg and Mr Dorsey both said that they were working hard to prevent a repeat of the 2016 presidential election — during which Russia interfered, according to US intelligence agencies.

“We’ve removed hundreds of pages and accounts involved in coordinated inauthentic behaviour — meaning they misled others about who they were and what they were doing,” Ms Sandberg told the committee.

“When bad actors try to use our site, we will block them.”

Facebook, Twitter and other technology firms have been on the defensive for many months over political influence activity on their sites and concerns over user privacy.

Republicans versus social media

Adding to pressure on the tech sector, the Justice Department later said it would meet with state attorneys-general, on September 25, to discuss concerns that social media platforms were “intentionally stifling the free exchange of ideas”.

Its statement did not specifically name Facebook and Twitter — but those companies have been harshly criticised by US President Donald Trump for what he sees as an effort to repress conservative voices.

Ahead of Wednesday’s hearings, US President Donald Trump, without offering evidence, accused social media companies of interfering in the congressional elections, telling the Daily Caller conservative website that social media firms are “super liberal”.

Democratic committee members accused Republicans of calling the hearing for political reasons.

Republicans control both the House and Senate and the elections will decide whether they keep their majorities.

“Over the past weeks, President Trump and many Republicans have peddled conspiracy theories about Twitter and other social media platforms to whip up their base and fundraise,” said Representative Frank Pallone, the committee’s top Democrat.

Conservative Republicans have repeatedly accused Twitter of “shadow banning,” or de-emphasising certain accounts in search results.

Mr Dorsey denied any deliberate attempt to target conservatives.

“Recently we failed our intended impartiality. Our algorithms were unfairly filtering 600,000 accounts, including some members of Congress, from our search auto-complete and latest results. We fixed it,” he said in his opening statement.

“We don’t consider political viewpoints, perspectives, or party affiliation in any of our policies or enforcement decisions. Period. Impartiality is our guiding principle.”

Shares in Twitter plunged 6.2 per cent, while Facebook dropped 2.3 per cent.

Other “FANG” and technology stocks also fell sharply, including Microsoft (-2.9pc), Amazon (-2.2pc), Netflix (-6.2pc) and Google (-1pc).

Market reaction

The tech-heavy Nasdaq index tumbled by a hefty 1.2 per cent, while the S&P 500 dropped 0.3 per cent.

However, the industrial skewed Dow Jones index rose slightly, by 0.1 per cent, to 25,975.

European investors were even more risk averse: London’s FTSE (-1pc), Frankfurt’s DAX (-1.4pc) and Paris’ CAC (-1.5pc) indices closed in the red.

Asian markets suffered even sharper losses yesterday, with Shanghai down -1.7 per cent and Hong Kong off -2.6 per cent, amid simmering US-China trade tensions which led to an emerging market sell-off.

Given the weak leads from global markets, the Australian share market is expected to fall in early trade.

ASX SPI 200 futures are trading 0.4 per cent lower.

The Australian dollar rose slightly to 71.9 US cents — but has slipped to 55.7 British pence and 61.8 Euro cents.

Topics:

business-economics-and-finance,

company-news,

regulation,

markets,

stockmarket,

currency,

australia,

united-states

First posted

September 06, 2018 08:30:28



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