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U.S. stocks traded well off session highs in late-morning trade Monday, with a decline in Facebook contributing to the midday retreat. The Dow Jones Industrial Average rose 1%, but it had previously gained more than 2% on the day. The S&P 500 was up 0.6%, less than half the 2% increase it had seen earlier in the session, which had represented its biggest one-day percentage gain since November 2016. The Nasdaq Composite Index rose 0.5%. The index, which is heavily weighted toward large-capitalization technology and internet stocks, previously rose 2.1%. Facebook fell 5.6%, with losses accelerating after the Federal Trade Commission said it was investigating the company's privacy practices. The social-media giant has been under tremendous selling pressure of late, and it is down more than 20% from its recent record high, a decline that puts it into bear-market territory. Despite Facebook's weakness, the technology sector remained up 1.1% on the day, and all 11 primary S&P 500 sectors were in positive territory. The gains on the day came on signs that concerns over a potential trade war were waning.
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News of a massive data breach hit Facebook hard last week.
Shares are at their lowest since July 2017.
Baird and Co. analyst Colin Sebastian says usage metrics are down, coinciding with the breach.
Watch Facebook in rel time here.
Facebook users are becoming increasingly less enthusiastic about the platform, according to a survey conducted by Baird and Co. following the news of political research firm Cambridge Analytica's hack into 50 million user accounts.
In a note to clients sent out Monday, Baird analyst Colin Sebastian said while there is no evidence of users deleting their accounts, Facebook usage metrics are looking shaky.
"Our latest survey indicates some additional decline in usage/engagement, particularly among younger demographics, coinciding with recent headlines around data privacy," Sebastian wrote.
Baird's survey asked users which platforms they are using more or the same amount of time. Facebook was the sharpest decliner in the survey.
This visual shows how Facebook's decline in favorability.
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"In our survey, 32% of respondents indicated stable/increasing Facebook usage in 1Q18, down from 38% in 4Q17 and 43% in 1Q17)," the note said.
"Among respondents age 25-34, Instagram showed the largest sequential uptick in favorable responses (27% indicated stable/growing usage vs. 19% in 4Q17), which supports the view that younger cohorts abandoning the core Facebook app are likely shifting usage to other Facebook-owned properties," Sebastian added.
And while there is some evidence advertisers are pulling back on spending, he thinks that'll be "short lived" because of Facebook's dominant share of internet users.
"There are few channels available that can match Facebook's return on ad spend," he said.
Sebastian lowered his price target to $210 a share, citing "the potential for brands and small businesses to pause some Facebook campaigns until headlines subside."
Facebook shares are down more than 18% since news of the breach broke.
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The US Federal Trade Commission has confirmed that it is investigating Facebook over its privacy practices, following recent revelations that data firm Cambridge Analytica harvested and exploited tens of millions of users’ data without their permission. Facebook’s stock renewed its downward slide, bringing the company’s total loss of market value to around $90 billion since the scandal broke 10 days ago.
“The FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook. Today, the FTC is confirming that it has an open non-public investigation into these practices,” said Tom Pahl, acting director of the FTC’s Bureau of Consumer Protection, in a statement.
The FTC will look into whether Facebook had violated a 2011 consent decree imposed by the regulator, in which the company promised not to share user data without their consent. In 2014, an app developed by a Cambridge University professor accessed the data of up to 50 million people, which he later passed onto Cambridge Analytica, a Trump campaign consultant.
If the FTC finds Facebook at fault, each violation could cost the company $40,000. Facebook faces multiple other probes, hearings, and investigations in several countries.
Here’s the full FTC statement:
“The FTC is firmly and fully committed to using all of its tools to protect the privacy of consumers. Foremost among these tools is enforcement action against companies that fail to honor their privacy promises, including to comply with Privacy Shield, or that engage in unfair acts that cause substantial injury to consumers in violation of the FTC Act. Companies who have settled previous FTC actions must also comply with FTC order provisions imposing privacy and data security requirements. Accordingly, the FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook. Today, the FTC is confirming that it has an open non-public investigation into these practices.”
Read next: Facebook is being investigated by the FTC. Here’s what it will ask
FACEBOOK'S shares have nosedived in the wake of its latest privacy blunder, wiping $50 billion (£35 billion) off the company's value.
But what's caused the sharp decline? And can Facebook fix the problem?
Facebook founder Mark Zuckerberg is yet to comment on his company's latest privacy blunder, which has sent his firm's stock prices plummeting
How much have Facebook shares fallen by?
Shares of Facebook fell a further 5 per cent on Monday, March 26, after the US consumer protection regulator said it was investigating how 50million users' data got into the hands of political consultancy Cambridge Analytica.
When markets closed in New York last night, shares had bounced back a fraction to around $160 each, still $25 less than a fortnight ago.
The US Federal Trade Commission confirmed it was probing the social media mammoth's privacy practices.
It comes after more than $50billion was wiped off the value of shares last week in the wake of concerns over data breaches.
Why are Facebook's shares plummeting?
Analysts blamed the decline on investors' reactions to fears of greater scrutiny of Facebook's handling of user data by US and European regulators.
The renewed concern over Facebook's approach to user privacy is fuelled by the platform's latest data breach.
This weekend, a report by The Guardian revealed that a company called Cambridge Analytica had harvested the personal data of 50 million Facebook profiles.
The data had been collected by a dodgy app masquerading as a personality quiz.
This information was allegedly used to map out voter behaviour in 2016 for both the Brexit campaign and the US presidential election.
Cambridge Analytica is a British company that helps businesses "change audience behaviour", and supposedly helped get US President Donald Trump elected.
Facebook Q&A WHAT has happened?
Facebook is accused of passing 50 million users’ information to British company Cambridge Analytica, without their consent. How was the information collected?
In 2014, 270,000 Facebook users took part in a personality quiz on an app on the network. The app harvested information from the person taking the quiz and all their friends. How was it used?
The data was sold to Cambridge Analytica who profiled US users in order to send them pro-Donald Trump campaign messages. Was this against Facebook’s rules?
Harvesting data was allowed but selling it on was not. Facebook said it demanded the data was deleted when it found out about “the breach”. Is this the case?
A whistleblower says this was never checked and all the information was kept, with some still available online.
Theresa May's spokesman called the allegations "very concerning".
And the UK data protection body is seeking a warrant to search Facebook's offices.
Meanwhile advertiser have been telling the social media giant "enough is enough"
ISBA, a trade body which represents major UK advertisers, was set to meet Facebook on March 23.
Adding to its woes, US Congress has called on Zuckerberg to testify to a committee over Facebook's use of the personal information.
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US senators Amy Klobuchar and John Kennedy have also called for a hearing about data security.
They say Facebook founder Mark Zuckerberg, along with other tech executives, must provide answers on the way they treat privacy rights.
Facebook has since suspended Cambridge Analytica.
The company is said to have known about the issue since 2015, but flatly denies that the fiasco was even a data breach.
