US Internet stocks sink after EU court ruling on data

Major US Internet company shares fell Tuesday after the top EU court ruled in a case involving Facebook that an agreement on cross-Atlantic data transfers was invalid for privacy reasons.

But blue-chip stocks closed slightly higher, pulled up by a 7.7 percent surge in DuPont over the sudden departure of its longtime chief executive Ellen Kullman.

The Dow Jones Industrial Average gained 13.76 points (0.08 percent) at 16,790.19.

The broad-based S&P 500 fell 7.13 (0.36 percent) to 1,979.92, while the tech-rich Nasdaq Composite Index lost 32.90 (0.69 percent) at 4,748.36.

The Nasdaq sank on the back of Internet and health shares.

Facebook lost 1.3 percent, Twitter 1.9 percent and Amazon 1.1 percent after the European Court of Justice invalidated the 15-year-old Safe Harbor agreement which allowed US Internet companies to move data on customers and consumers across the Atlantic for holding and use in US-based databanks.

The ruling could raise costs and operating difficulties for the data-dependent companies.

Google though did not appear harmed by the ruling, adding 0.6 percent.

Health insurers also lost sharply amid worries the sector has pushed too far, valuation-wise.

UnitedHealth Group lost 3.0 percent, Anthem 2.4 percent, Aetna 3.7 percent, and Cigna 2.1 percent.

Michael James of Wedbush Securities said some of the fall Tuesday spilled over from the 10.6 percent plunge in Illumina, a biotech firm which said it would fall short of fourth-quarter revenue forecasts.

"The negative sentiment from that is carrying over to just about everything healthcare-related," he said.

The abrupt retirement of DuPont's chief executive, with no replacement named, came as the company slashed its profit outlook for the year.

Nevertheless investors bid up the shares sharply.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.04 percent from 2.06 percent Monday, while the 30-year slipped 2.87 percent from 2.90 percent. Bond prices and yields move inversely.