A fake tweet from the account of the Associated Press sent stocks tumbling more than 140 points within minutes, erasing all of the day's gains and then some, before bouncing back just as rapidly.
The erroneous tweet, which was posted around 1:07 p.m. ET, said "BREAKING: Two Explosions in the White House and Barack Obama is injured." The tweet was up for a few minutes before AP's account was suspended, and presumably seen by many of AP's nearly 2 million followers. The tweet was also retweeted by almost 1,500 other Twitter users.
By 1:10 p.m. ET, the Dow was down almost 13 points, or 0.1% on the day. Just prior to the tweet, the blue-chip index had been up about 0.9% for the day. Stocks fully recovered from the plunge a few minutes after hitting the low of the day, as investors realized the tweet had been made by a hacker and was not true.
From its corporate communications account, AP clarified within minutes that the tweet was "bogus" and later elaborate that its account had been hacked and the tweet was fake.
Still, the tweet briefly sparked panic and confusion, and raised questions about the power and influence of social media in global financial markets.
We just found out how influential twitter is. A hacked tweet from AP (1.9 mln followers) and around 2 minutes equals 10 handles on $SPY.—
John Kicklighter (@JohnKicklighter) April 23, 2013
What's most amazing about that fake tweet move is that it affected every single asset class. Fin markets more intertwined than ever—
Enis Taner (@EnisTaner) April 23, 2013
Questions were also raised about how the tweet would impact investors confidence, as many are spooked by the growing number of stock market flash crashes and high frequency trading.
Wonder if markets still sell off here. While it was a false rumor, it is a reminder of the world we live in.—
Michael A. Gayed,CFA (@pensionpartners) April 23, 2013
The tweet also raised the urgency for Twitter to improve its verification system.
Of course AP's twitter account isn't the first prominent one to get hacked.
Over the weekend, the Twitter accounts of CBS's (CBS) 60 Minutes and 48 Hours were hacked, and the accounts remain suspended.
For the first time this year, investors took money off the table.
According to the latest data from the Investment Company Institute, investors pulled $1.13 billion from U.S. stock mutual funds during the week ended Feb. 27. That's the first time investors took money out of stocks this year, and it came just days before the Dow hit a record high.
But that doesn't mean the tide has turned. One week of MORECatherine Tymkiw - Mar 6, 2013 1:05 PM ET
By Lee Munson
In the past when stocks hit records, investors would start rushing in to buy. This time around, it's the opposite: They've been sitting in cash, have missed the rally, and are beyond depressed.
"Now we'll never get in," they say.
I feel for them. They're in a pickle. I get why it doesn't feel good to buy stocks after a big run.
But comparing price levels today to some arbitrary date MOREMar 6, 2013 11:44 AM ET
The Dow Jones industrial average rose to a new all-time high Tuesday ... sort of.
The record that everyone is talking about is in nominal terms and doesn't take into account the impact of inflation, which has increased more than 10% during the past five years, according to the government's Consumer Price Index (CPI).
If you factor that in, the blue chip index is actually still about 11% below its all-time inflation adjusted high, MOREHibah Yousuf - Mar 6, 2013 10:25 AM ET
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
The Dow Jones industrial average hit a new all-time high today, topping the 14,200 level for the first time. Forgive me if I'm not celebrating.
Sure, I'm just as thrilled as the next guy and gal MOREPaul R. La Monica - Mar 5, 2013 12:00 PM ET
After taking money off the table toward the end of 2012, individual investors came back with a vengeance in January, adding a record $80.6 billion to their mutual fund holdings, according to the Investment Company Institute.
Investors added nearly $38 billion to stock funds during the month, with a little more than half of that flowing into international stocks.
Nearly $33 billion, or 41% of the total monthly inflow, went into MOREHibah Yousuf - Feb 27, 2013 3:43 PM ET
The Dow topped 14,000 Friday morning. And while you would think this would be cause for raucous celebration, traders on StockTwits were humming the opening track off Miles Davis' classic "Kind Of Blue" album: So what?
Looking for my 'Dow 14,000 - Thank You Bernanke' T-shirt $DJIA
You mean to tell me that you think the Federal Reserve is pumping this market up to irrationally exuberant levels with its wanton spending on MOREPaul R. La Monica - Feb 1, 2013 12:18 PM ET
It was 25 years ago today when Wall Street suffered one its biggest market crashes in history.
On October 19, 1987, the Dow Jones industrial average (INDU) tumbled 508 points, losing more than 22% of its value and marking the second-largest percentage loss in a singly day. (The worst was when the Dow lost 24% on December 12, 1914, when the New York Stock Exchange reopened after having been closed for MOREHibah Yousuf - Oct 19, 2012 2:53 PM ET
Investors continued to punish Hewlett-Packard (HPQ) Thursday, a day after the company issued a grim outlook for 2013.
Hewlett-Packard extended the previous day's decline, after getting hammered on Wednesday. The stock has had a rough year, sinking more than 40% so far. That makes HP the worst Dow (INDU) performer by far this year.
In fact, it's been a tough couple of years for HP as the company struggles to stay MORECatherine Tymkiw - Oct 4, 2012 12:47 PM ET
Investors might want to stop and thank the iPhone 5's clamoring herds for a boost to their stock portfolio this year.
Shares of Apple (AAPL) have surged 74% this year, helping the S&P 500 (SPX) log a respectable 16% increase. Take Apple out of the mix and the broad index would only have gained 14%, according to research from S&P/Dow Jones Indices.
Apple accounts for nearly 5% of the market cap of MOREMaureen Farrell - Sep 21, 2012 2:11 PM ET
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