The Tweet Heard Round The Markets

Hackers infiltrated the AP’s account this afternoon and deployed this:


Supporters of the Syrian dictator have claimed responsibility. While no news outlets took the tweet seriously, Wall Street did momentarily:

U.S. stocks and the dollar briefly plunged Tuesday afternoon and U.S. Treasury bonds and gold prices soared, after a tweet from the Associated Press’s Twitter account claimed that there were two explosions in the White House and that President Barack Obama had been injured.

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Markets quickly swung back after the Associated Press said on its corporate website that its account had been hacked. The White House confirmed that there had been no incident. The Dow Jones Industrial Average dropped 145 points between 1:08 p.m. EDT and 1:10 p.m., following the erroneous tweet. Stocks soon recovered, regaining broad gains that put the major benchmarks on track for a third day of gains.

Observers said the episode highlights the growing use by players in financial markets of social media such as Twitter and Facebook, FB +0.15% and underscores the dangers of security breaches at a time when many investors are quick to trade on news.

Julianne Pepitone zooms out:

News organizations are a particularly attractive target thanks to their reach and influence.

The Twitter accounts of CBS’ (CBSFortune 500) 60 Minutes and 48 Hours were compromised over the weekend. In July 2011, News Corp.’s (NWS) Fox News account — followed by more than 2 million people — was hacked and tweeted that President Obama had been assassinated. That same month, eBay’s (EBAYFortune 500) PayPal United Kingdom Twitter feed was hacked, and the profile photo was changed to a pile of excrement. Comcast’s (CMCSA) NBC News account was also compromised two months later, falsely tweeting that a plane had crashed into the Ground Zero area of Manhattan. In February of this year, both the Burger King (BKW) and Jeep Twitter accounts were hacked during the same week. …

After years of hacks that typically involved little more than obscene language, Twitter’s subpar security measures have now caused serious real-world consequences. Many hacks happen when account owners use guessable passwords or access Twitter over public Wi-Fi and shared computers. If one person who tweets from a corporate account loses his or her phone, an entire corporation’s Twitter account could be at risk.

(Chart of today’s Dow from Google)