Tech stocks hammered as Biden's economic agenda stalls, Facebook goes dark

U.S. stocks were hit hard Monday as President Biden’s economic agenda stalled and a Facebook outage weighed down tech shares. 

FACEBOOK, WHATSAPP OUTAGE WIDESPREAD

The Nasdaq Composite index tumbled 311 points, or 2.14%, while the Dow Jones Industrial Average and the S&P 500 index lost 0.94% and 1.3%, respectively. Monday's losses extended the Nasdaq's decline to 7.3% from its Sept. 3 peak. 

The tech-heavy Nasdaq's decline was amplified by a sharp drop in Facebook Inc. shares after the social media giant and its Instagram and WhatsApp services were knocked offline the day after a whistleblower said the company was prioritizing profits over reining in hate speech and misinformation. A Senate hearing on the matter is scheduled for Tuesday. 

Broader selling came amid ongoing inflation worries, which ratcheted higher after government data released Friday showed consumer prices surged in August at their fastest annual pace in 30 years. 

This as House Speaker Nancy Pelosi over the weekend delayed votes on both a bipartisan infrastructure bill and a $3.5 trillion spending plan amid party infighting. Pelosi, D-Calif., had previously promised moderate Democrats that a vote on the bipartisan plan would occur no later than Sept. 27, but party progressive said they would vote down the measure if the $3.5 trillion package was not passed first. 

SHARP RISE IN RATES WOULD HIT STOCKS: GOLDMAN SACHS

However, the broader spending plan, which the Democrats are hoping to pass via budget reconciliation to avoid a Republican filibuster, was doomed to fail in the Senate after moderate Democratic Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona came out against the size of the package.

Democrats are now looking for ways to scale down spending plan with votes on bipartisan bill now expected by Oct. 31. There is no timeline for a vote on the social spending package.  

Meanwhile, shares of Evergrande Group were suspended in Hong Kong ahead of an announcement about a "major transaction." Chinese state media Global Times reported Evergrande will sell about 51% of its property services business to the developer Hopson.  

Closer to home, Merck & Co. continued higher for a second day after the drugmaker announced last week that its pill used to treat COVID-19 showed positive results in a key study. Shares of rival vaccine makers Moderna Inc. and Novavax Inc. declined on the news. 

Elsewhere, Tesla Inc. delivered 241,300 electric vehicles in the third quarter, exceeding the 227,000 deliveries that Wall Street analysts were expecting. The total was 72% above the 140,000 deliveries during the same period last year. 

Hedge fund Engine No. 1 declared its support for General Motors’ goal to have all of its vehicles be electric by 2035. The hedge fund gained notoriety earlier this year for seating three independent climate-focused directors on Exxon Mobil’s board. 

Delta Air Lines Inc. reinstated its initial quarterly revenue guidance amid improving ticket sales. The company expects revenue to be 30% to 35% below 2019 levels. 

In commodities, West Texas Intermediate crude oil jumped $1.74 to $77.62 a barrel while gold ticked up $9.20 to $1,766.20 an ounce.

Overseas markets were broadly lower. 

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European bourses finished weaker after seeing early strength with Britain's FTSE 100 slipping 0.23% while France’s CAC 40 and Germany’s DAX 30 lost 0.61% and 0.79%, respectively.

In Asia, Japan’s Nikkei 225 slid 1.13% and Hong Kong’s Hang Seng index tumbled 2.19%. China’s Shanghai Composite was closed for holiday, and won’t reopen until Friday.