Dow Tumbles Facebook's Decline Leads to Sharp Losses for Nasdaq

Stocks fell on Monday, March 19, as Wall Street prepped for what could be the first of as many of four rate hikes from the Federal Reserve later this week and Facebook Inc. (FB) was in hot water over reports that as many as 50 million of its users may have had their data compromised.

The Dow Jones Industrial Average fell 195 points, or 0.78%, to 24,751, the S&P 500 declined 0.71% and the Nasdaq was down 1% as Facebook shares tumbled 5.3%.

Facebook disclosed over the weekend that data analytics firm Cambridge Analytica, which had ties to the Trump campaign, improperly obtained and failed to destroy private data on 50 million users.

Lawmakers called it a data breach and said Facebook CEO Mark Zuckerberg should testify before the Senate Judiciary Committee.

Facebook said that Cambridge University professor Aleksandr Kogan, who used an app on the social media network to gather information from 270,000 users who volunteered for a "personality test," lied to the company when he then shared that data, as well as information on the volunteers' friends, with Cambridge Analytica, which then allegedly used it on behalf of the 2016 election campaign of Donald Trump. News of the potential misuse of the data was first reported by The New York Times.

"The claim that this is a data breach is completely false," said Paul Grewal, Facebook's vice president and general counsel. "Aleksandr Kogan requested and gained access to information from users who chose to sign up to his app, and everyone involved gave their consent. People knowingly provided their information, no systems were infiltrated, and no passwords or sensitive pieces of information were stolen or hacked."

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The Federal Reserve begins a two-day meeting on Tuesday, March 20, and it's widely expected the central bank will hike rates by a quarter percentage point. Wall Street, however, may be more interested in whether the Fed will boost its forecast for rate hikes this year to four from previous forecasts of three.

A trial over the Department of Justice's lawsuit to block AT&T Inc.'s ( T) $85 billion purchase of Time Warner Inc. ( TWX) begins this week in Washington.

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