Dow plunges more than 400 points — tech stocks crushed by news of Facebook breach

Stocks fell around the world as technology shares dropped, led lower by a reported data breach that sent Facebook sliding the most in 2 1/2 years.

Facebook’s loss of as much as 8.1% spurred a decline of more than 2% in the tech-heavy Nasdaq 100 index, while the benchmark S&P 500 slid 1.5% and the Dow Jones industrial average decreased 1.3%.

It’s a situation that highlights an unfortunate reality about mega-cap technology firms like Facebook: While their outsized weighting in major indexes is a boon when their shares are rising, the comeuppance can be swift and unforgiving during times of weakness. And it leaves only one group poised to benefit: short sellers.

It’s also likely that investors are positioning ahead of the two-day Federal Reserve meeting that starts on Tuesday. Newly appointed Fed chair Jerome Powell will be making his first decision on interest rates, and some market participants are fearful that hawkish actions will drive more equity selling. After all, the additional yield afforded by a rate hike theoretically makes bonds more attractive relative to their stock counterparts.

Selling pressure in equities was also felt in overseas markets, as the Nikkei 225 lost 0.9%, the Shanghai Composite fell 0.7%, and the Stoxx Europe 600 declined 1.2%.

Here’s a rundown of other asset classes, including US Treasurys, which traders are closely watching:

-10-year US Treasurys (+0.55%)

-US Dollar Index (-0.28%)

-Crude oil (WTI) (-0.18%)

-Cboe Volatility Index (VIX) (+24%)

Looking specifically at tech, these were among the biggest non-Facebook decliners in the Nasdaq 100 on Monday: KLA-Tencor (-6.9%), NetEase (-4.1%), Incyte (-3.9%), Dish Network (-3.8%), Broadcom (-3.8%).

|Business Insider