Sharp declines in big tech stocks weighed on the broader technology, media and telecommunications sector for the week ended Oct. 12, which marked one of the most volatile trading weeks of the year to date.
U.S. stocks plunged to record lows this week as trade war fears and concerns about global growth fueled a general market rout. Declining tech stocks contributed to much of Wall Street's financial woes throughout most of the week, but the tech sector saw some recovery Oct. 12.
Chipmakers NVIDIA Corp. and Advanced Micro Devices Inc. saw some of the more sizable tech losses midweek. NVIDIA shares were trading at $244.94 as of midday Oct. 12, down 9.24% for the week; AMD's stock was trading at $26.38, down 3.56%.
Raymond James this week lowered its 2019 earnings estimates for a handful of chip stocks, anticipating weakening business trends for the companies. Rising interest rates are also damaging rapidly growing chip stocks as investors adjust to the new environment, the firm's research group said.
Alphabet Inc., the parent of Google LLC, also saw a significant drop. Google on Oct. 8 said it is shutting down its Google+ social network, which had underperformed expectations among consumers and proven expensive to maintain. Google will continue to support a social product for enterprise. The announcement came with a company disclosure that a bug on Google+ had improperly shared the data of hundreds of thousands of users.
While the bug was discovered and fixed in March, the company said it had not disclosed the issue earlier because it found no evidence that any of the exposed profile data was misused and had no way to accurately identify the impacted users. An Oct. 8 article in The Wall Street Journal suggested Google also chose not to disclose the bug because executives feared it would trigger increased regulatory interest and draw comparisons to Facebook's data scandal involving the now-defunct Cambridge Analytica LLC.
Sen. Richard Blumenthal, a Democrat from Connecticut who serves as ranking member on the Subcommittee on Consumer Protection, Product Safety, Insurance and Data Security, has sent a letter to the U.S. Federal Trade Commission calling for an investigation of the Google bug, including the delay on publicly disclosing it.
Branding expert Rob Frankel said in an interview that Google's decision not to immediately disclose the security breach could have a lasting impact on the firm's image.
"All Google has is a name and product and a service, which means they have never formalized or codified any means by which the public can perceive them," Frankel said. "When you don't create your own brand strategy, the public creates it for you."
As of midday Oct. 12, Alphabet's stock was trading down 5.31% for the week, to $1,105.80 per share.
Facebook Inc. shares also slid amid the broader tech rout. The social media giant recovered somewhat on Oct. 11, the same day it announced a culling of 559 pages and 251 accounts for "coordinated inauthentic behavior" and repeat violations of spamming rules.
Facebook management said some accounts were created to mislead people into thinking that they were forums for legitimate political debate and most actively worked to make their content appear more popular on the social networking platform than it really was. The platform has removed a myriad of accounts this year for similar reasons.
Facebook stock was trading down 3.15% as of midday Oct. 12, to $152.37 per share.
Apple Inc. stock also declined amid the tech tumble and a report on its original programming plans.
According to a CNBC report, Apple intends to give away some original video content on an upcoming service to Apple device owners. The planned service, which is slated to launch in early 2019 for iPhone, iPad and Apple TV, will also allow customers to sign up for online-only services, such as those from HBO and Starz.
Gene Munster, managing partner at venture capital firm Loup Ventures, said in a note that Apple providing free original content to users will "build a loyal viewer base" that enables the company to upsell to a range of paid offerings.
Apple stock was trading at $219.07 midday Oct. 12, down 2.33% for the week.