Action in the markets | Calamatta Cuschieri

Global stocks tumble while Maltese celebrate The Feast of St Joseph, Facebook admit to data breach & the UK and EU agree on transition terms

Facebook Inc. shares posted their steepest drop since 2015 and sparked a global sell-off in tech stocks
Facebook Inc. shares posted their steepest drop since 2015 and sparked a global sell-off in tech stocks

U.S. markets finished sharply lower on Monday, with the S&P 500 and the Nasdaq logging their worst days since February 8, as concerns about Facebook Inc.’s management of user data sparked a selloff in technology shares together with uncertainty about the Federal Reserve’s upcoming rate decision. The Dow Jones Industrial Average fell 335.60 points, or 1.4%, to 24,610.91 with all components, except Boeing Co. finishing in the red.

UK markets also lost ground Monday, squeezed by a rally in the pound that came after Brussels and London agreed on the broad terms of a Brexit transition deal. A stronger pound sometimes weighs on the FTSE 100 as about 75% of the benchmark’s revenue is made overseas, and that revenue therefore shrinks when translated back into sterling. The FTSE 100, the UK’s blue-chip benchmark, slumped 1.7% to close at 7,042.93 with the pound jumping to $1.4037, up from $1.3944 late Friday.

Facebook data breach

Facebook Inc. shares posted their steepest drop since 2015 and sparked a global sell-off in tech stocks as U.S. and European officials demanded answers to reports that a political advertising firm retained information on millions of the social network’s users without their consent. The company is accused of failing to properly inform users that their profile information may have been obtained and kept by Cambridge Analytica, a UK-based political consulting firm.

Politicians on both sides of the Atlantic are calling on Chief Executive Officer Mark Zuckerberg to appear before lawmakers to explain how the data-analysis firm that helped Donald Trump win the U.S. presidency, was able to harvest the personal information. Facebook fell as much as 8.1 percent to $170.06 on Monday in New York, wiping out all of the year’s gains so far. That marked the biggest intraday drop since August 2015.

Brexit Revelations

The U.K. and EU have reached a deal on the transition agreement that businesses are keen to get pinned down for the period immediately after Brexit. UK negotiator, Brexit Secretary David Davis said Monday's transition agreement, which is conditional on both sides agreeing a final withdrawal treaty, would smooth the path to a future permanent relationship. Issues still to be resolved, however, include the Northern Ireland border and Scotland’s fishing industry.

The UK has said it had secured a number of improvements to the text, including an explicit reference to Gibraltar being covered by the agreement and the creation of a joint committee to oversee the process. Both the UK and the EU hope the terms of an agreement on the transitional period can be signed off by Mrs May's fellow 27 leaders at the EU summit this week.


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