Toyota Issues Recall; Tech Executives Facing Capitol Hill Grilling

By Joyce Yu

Toyota is recalling more than 1 million of its hybrid vehicles across the world over a problem with their electrical systems which in some cases can cause fires. Affected vehicles covers Prius, Prius plug-in hybrid and C-HR SUV models. As a result, shares of Toyota listed on the New York Stock Exchange dipped 1.15% to US120 on Wednesday.

Manufactured between June 2015 and May 2018, these vehicles are mostly in Japan, while just under 200,000 are in the United States. The rest were sold in Europe and other markets. US customers will start receiving recall notices by mail this month. Declining to comment on whether the defects have resulted in any injuries or deaths, Toyota said the problem involved wire harnesses that connect to the cars’ power control units. These can wear away over time, generating heat.

This is not the first time for the Japanese carmaker to recall Prius. In 2016, it recalled more than 1.7 million of the vehicles over issues related to their air bags and parking brakes.

Separately, leaders of big social media including Twitter, Facebook and Google headed down to Washington today to appear in front of Congress on meddling in the 2016 U.S. election. This has sent their stock prices lower. Twitter fell 5.4%, Facebook dipped 1% while Google lost 2%.

Jack Dorsey, co-founder and chief executive officer of Twitter admitted that the company “hasn’t done enough” in the past to promote user transparency, but he stressed Twitter has significantly accelerated efforts to challenge suspected bots. Dorsey was testifying alongside Facebook COO Sheryl Sandberg. Google was also invited to testify, but the tech giant declined to send its CEO or parent company Alphabet’s CEO.

Gene Munster, managing partner of Loup Ventures, told investors in an email that he believes “Twitter is more at risk,” because its fraud detection is “less sophisticated” than Facebook’s.

The entire stock market now soakein the glow of Big Tech, with the tech sector making up 26% of the S&P 500, its highest weighting since it peaked at just above 29% in the year 2000. Strategists at Bespoke Investment Group opined: ” We continue to be concerned about the tech sector’s heavy weight, which will eventually be a big area of pain during the next bear market. But until we start to see signs of a breakdown, the smart play is to stay long and strong.”