Stocks in the US mostly weakened on Wednesday amid a selloff in the information technology sector after the US Department of Justice took aim at social media, expressing concerns that the companies are stifling speech.
The tech group was weak from the start as top executives from Twitter (TWTR) and Facebook (FB) appeared before lawmakers to hear their concerns about the foreign influences that try to affect US politics through social media. And the Justice department is planning to meet with state attorneys general over concerns that the platforms are “intentionally stifling the free exchange of ideas,” multiple media outlets cited a statement as saying.
The Standard & Poor’s 500 tech sector dropped 1.5%, with Twitter skidding 6.1% and Facebook shedding 2.3%. Netflix (NFLX) dropped 6.2% and Amazon.com (AMZN) lost 2.2%. Tech names were among the biggest decliners on the Dow Jones Industrial Average, with Microsoft (MSFT) retreating 2.9%. Visa (V) shed 2.9% in the biggest retreat among the blue chips.
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But the overall measure clawed back some of its losses during the session amid strength in its industrial and consumer stocks. Caterpillar (CAT) rose 1.7% and Walmart (WMT) added 1.3%. Energy ended slightly weaker as oil prices as Gordon, now weakened into a tropical depression, missed Gulf of Mexico offshore rigs.
In company news, JD.com (JD) extended its slide to the lowest since early 2017 and ended 11% lower after media outlets said the arrest of its founder and CEO last week was on suspicion of rape. American Express (AXP) fell 1.2% after the Wall Street Journal reported that the FBI is probing price practices in the company’s foreign-exchange unit.
Vera Bradley (VRA) jumped 15% after fiscal second-quarter results bested Wall Street views and the company guided for upbeat third quarter revenue. Darden Restaurants (DRI) rose 1.4% after Oppenheimer raised its price target on the stock to $130 from $115 while retaining its outperform rating.
By the close, the Nasdaq was down 1.2%, the S&P 500 slipped 0.3% and the Dow was up about 0.1%.
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