Although contained, this is a marvelous example of stupid computers programmed by stupid humans with stupid algorithms doing damage before smarter humans can intervene. There is also no proof whatsoever this was done by anyone connected to Syria. The plot thickens.
Twitter Hoax Sparks Swift Stock Swoon
A short-lived hoax on Twitter briefly erased $200 billion of value from U.S. stock markets on Tuesday, underscoring the vulnerability of financial markets to computerized trading programs that buy and sell shares without human intervention.
A tweet purportedly from the Associated Press just before 1:08 p.m. reported two explosions in the White House and that President Barack Obama had been injured. The posting sent the Dow Jones Industrial Average tumbling roughly 145 points in an instant.
Minutes later, the AP said the tweet was a fake resulting from hacking by an outside group, and the White House confirmed there were no explosions. But traders employing so-called algorithms that automatically buy and sell shares after scanning news feeds—including posts on social media sites such as those run by Twitter Inc. and Facebook Inc. FB +0.04% —had already taken action.
The two-minute selling spree left many traders stunned and dismayed, even though the market quickly recovered the losses afterward.
“It's frustrating and scary that a tweet can erase hundreds of billions from the market in a short time, but that's the world we live in,” said R.J. Grant, associate director of equity trading at Keefe, Bruyette & Woods.
A group called the Syrian Electronic Army took responsibility on its own Twitter account for the fake AP message. The group, which describes itself as “a group of enthusiastic Syrian youths” who support Syrian President Bashar al-Assad, recently has targeted other media organizations. An AP spokesman said the news organization was unable to determine the origin of the hacking incident.
