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A man poses with a magnifier in front of a Facebook logo on display in this illustration taken in Sarajevo, Bosnia and Herzegovina, in this December 16, 2015, file photo.DADO RUVIC/Reuters

The rout in technology shares picked up steam Thursday, as renewed woes at Facebook Inc. and the threat of Chinese trade actions against the industry sent the Nasdaq 100 Index to its steepest loss in six weeks.

Facebook renewed its slide as the controversy over its handling of user data prompted calls for the Chief Executive Mark Zuckerberg to appear before lawmakers. The sector was buffeted by fears of a trade war with China after President Donald Trump slapped tariffs on $50 billion of goods. The Federal Reserve's decision on Wednesday to raise rates and possibly accelerate the pace of tightening also has investors on edge.

"We've got a confluence of events: We've got some Facebook going on, some trade war going on, and higher interest rates going on," Paul Nolte, a portfolio manager at Kingsview Asset Management in Chicago, said by phone. "It's hitting the tech sector kind of directly. The rules are changing, and those companies are saying, 'How do we adapt to the rules'?"

The Nasdaq 100 tumbled 2.5 per cent at 4 p.m. in New York, leaving it 6.3 per cent below the fresh record it set 10 days ago. Selling was heaviest in the FAANG cohort, with Facebook's 2.7-per-cent slide taking it lower by 11 percent since the latest data-use controversy erupted over the weekend. Apple Inc. sank a fifth day, Inc. lost 2.4 per cent and Netflix Inc. fell 3.1 per cent.

The news for the sector didn't improve after the close when high-flyer Micron Technologies reported quarterly results that sent the stock lower by 2.2 per cent as of 4:10 p.m.

Thursday's selling made an already dismal week for the sector worse. Since Monday, $2.5 billion has been yanked from the biggest technology-heavy ETF, the PowerShares QQQ Trust Series 1, better known by its ticker QQQ. Other funds are seeing similar outflows.

China has said it would retaliate to any tariffs in in kind, making vulnerable a slew of technology companies that have complex supply chains in the country. Last year, 20 per cent of Apple's revenues came from China, according to Bloomberg data. For Intel Corp., revenue from China was 24 per cent. Both tech behemoths were down Thursday. "Some of the parts are made in China, you have that relationship," said Quincy Krosby, chief market strategist at Prudential Financial Inc. "As the Chinese economy picks up, the Chinese have more disposable income to enjoy technology. We also know the Chinese are becoming more and more sophisticated with technology."

U.S.-listed shares of Chinese companies are also feeling the heat. The American depositary receipts for Baidu Inc. and Alibaba Group Holding Ltd. showed both Chinese tech giants under substantial pressure, both falling more than 4 per cent.

Crisis Spreading

But the big news remains Facebook, which has been struggling ever since news of the data breach broke, as investors worry that the government could impose regulations on the entire social media industry. Zuckerberg spoke out Wednesday, outlining steps aimed at mitigating chances of a future leak. But he wasn't able to appease critics.

"The entire technology complex is worried about what Mark Zuckerberg said last night, that maybe we should be regulated," said Jamie Cox, a managing partner for Harris Financial Group in Richmond, Virginia. "All of a sudden you have all of these technology companies that are going, 'I can't believe he said that,' because that would basically hurt technology companies' earnings potential."

The company's crisis has spread to the broader technology sector, as seen in Nasdaq's decline and outflows from ETFs that until recently had been Wall Street darlings.

Of the nearly 1,500 U.S. equity ETFs tracked by Bloomberg, only eight funds have attracted more cash this year than QQQ. Indeed, it had its third largest weekly inflow on record just last week. But since Monday, investors have been racing away from the $63-billion ETF.

Facebook is the ETF's fourth largest holding and Apple is its biggest. The other so-called FAANG stocks -- Facebook, Apple, Inc., Netflix Inc. and Google parent Alphabet Inc. -- are also well represented in the portfolio. An equal-weighted index of the five companies is down 4.8 per cent this week.

Investors also are turning their backs on State Street's Technology Select Sector SPDR Fund, ticker XLK, in which Facebook is the third biggest holding and Apple is the largest. The ETF has seen outflows four of the last five days. Before that, the fund had six straight days of inflows.

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