Wall Street edges up on energy bump; Facebook slide continues
Reuters
Published Mar 20, 2018 03:12PM ET
Wall Street edges up on energy bump; Facebook slide continues
By Chuck Mikolajczak
(Reuters) - U.S. stocks edged up on Tuesday as higher oil prices buoyed the energy sector, but another slump in Facebook Inc (O:FB) shares curbed gains.
Oil prices rose more than 2 percent to touch a three-week high, driven by tensions in the Middle East and the possibility of further declines in Venezuelan crude output.
Those gains helped the S&P energy index (SPNY) up 0.95 percent, making it easily the best performing of the 11 major S&P 500 sectors.
Facebook Inc (O:FB) shares were down 4.2 percent. The social media company said on Tuesday it faced questions from the U.S. Federal Trade Commission about how its users' personal data was mined by a political consultancy hired by President Donald Trump's campaign.
The stock has fallen about 12 percent over the past two session, on track for its biggest two-day decline since July 2012 in a drop that has weighed heavily on equities.
U.S. and European lawmakers have demanded an explanation of how the consultancy gained access to the data and why Facebook failed to inform its users, raising broader industry questions about consumer privacy and whether heavier regulation is on the horizon.
Shares of Snap Inc (N:SNAP) fell 3.56 percent, while Twitter Inc (N:TWTR) shares tumbled 9.47 percent. The Global X Social Media ETF (O:SOCL) lost 1.2 percent.
"There is a secular issue with Facebook – time spent and user growth. That is the real reason we are going down and sellers basically just wanted a reason to latch onto and the latest headlines that came out were the perfect opportunity," said Mohannad Aama, Managing Director, Beam Capital Management LLC in New York.
"I don’t think the selling is over yet in Facebook but it is a characteristic of the weak market overall."
The Dow Jones Industrial Average (DJI) rose 127.22 points, or 0.52 percent, to 24,738.13, the S&P 500 (SPX) gained 3.89 points, or 0.14 percent, to 2,716.81 and the Nasdaq Composite (IXIC) added 15.68 points, or 0.21 percent, to 7,359.92.
Facebook was the biggest drag on both the Nasdaq and S&P 500 while the Dow, which does not include the social media company, had the largest gain of the three major Wall Street indexes.
Oracle (N:ORCL) dropped 8.7 percent after the business software maker reported lower-than-expected quarterly revenue.
Financial stocks (SPSY) edged up 0.27 percent as investors awaited a near-certain interest rate hike at the end of the Federal Reserve's two-day meeting on Wednesday.
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Market participants largely expect a total of three rate hikes this year, although some have not written off the possibility the Fed will hike four times.
Shares of defense companies gained after Reuters reported Trump plans to boost the exports of lethal drones to more U.S. allies. Kratos Defense (O:KTOS) rose 3.7 percent and Boeing Co (N:BA) gained 1.9 percent.
Written By: Reuters
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