Nasdaq falls as U.S. lawmakers grill Facebook, Twitter executives

The Nasdaq fell more than 1 percent on Wednesday, dented by technology stocks after Facebook Inc and Twitter Inc executives defended their companies before sceptical U.S. lawmakers.

Adding to pressure on technology stocks, the Justice Department later said it would meet with state attorneys general to discuss worries that social media platforms were "intentionally stifling the free exchange of ideas." Facebook and Twitter were not specifically named.

Twitter shares dropped 5.8 percent, while Facebook shares fell 2.5 percent, weighing on both the Nasdaq and the S&P 500.

Shares of other tech companies, including Alphabet Inc , Snap Inc and Microsoft Corp , also fell. In the consumer discretionary sector, investors also sold off shares of Amazon.com Inc and Netflix Inc , the two members of the group of stocks known as FANG.

Tech and consumer discretionary stocks were the biggest weights on the S&P 500. The S&P 500 technology index fell 1.5 percent, and the S&P 500 consumer discretionary index fell 1.0 percent.

"Anytime any company testifies before Congress, there`s the potential for additional regulation to be the result," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. "But there`s more concern simply about their customer base, whether people would shy away from these sites."

The Dow Jones Industrial Average <.dji> rose 0.84 points, or 0 percent, to 25,953.32, the S&P 500 <.spx> lost 8.42 points, or 0.29 percent, to 2,888.3 and the Nasdaq Composite <.ixic> dropped 95.74 points, or 1.18 percent, to 7,995.51.

The S&P 500 losses were also due to a fall in energy stocks.

Halliburton Co fell 6.5 percent after the oilfield services provider warned third-quarter earnings could be hurt from moderating activity in the Permian Basin and a slower-than-expected ramp-up of new Middle East contracts.

Rival Schlumberger dropped 1.5 percent and Baker Hughes , the oilfield services arm of General Electric , fell 2.6 percent.

With concerns over trade simmering, Commerce Department data showed that the U.S. trade deficit hit a five-month high in July, which economists said could heighten the White House`s resolve to aggressively pursue an "America First" approach to trade.

The data comes amid concerns that a U.S. proposal to impose tariffs on $200 billion more in Chinese imports could go into effect soon after a public comment period ends on Thursday, even as the U.S.-Canada talks to renegotiate the North American Free Trade Agreement continue.

China`s JD.com slid 10.5 percent, down for the second day in a row, after police said the retailer`s Chief Executive Officer Richard Liu was arrested in Minneapolis last week after a rape allegation. Liu has denied any wrongdoing and was released on Saturday.

Declining issues outnumbered advancing ones on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.58-to-1 ratio favoured decliners.

The S&P 500 posted 45 new 52-week highs and nine new lows; the Nasdaq Composite recorded 93 new highs and 46 new lows.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)