By Chris Morran
Earlier today, someone hacked the Associated Press’s Twitter feed and decided to use this opportunity to let the world know that there had been explosions at the White House and that President Obama was injured, neither of which were true. Not so long ago, this might have sent MySpace pages ablaze but would have been ignored by Wall Street. Oh, how we dream of those more innocent days.
The AP has confirmed the hack and posted a statement on its website saying that “The attack on AP’s Twitter account and the AP Mobile Twitter account was preceded by phishing attempts on AP’s corporate network.”
See that brief plunge in the graph above? That’s the Dow Jones Industrial Average dropping 145 points in two minutes.
“We all started looking at it to figure out what was going on, and just as quickly there was another wave of noise after the AP denied the story,” one broker on the NYSE floor tells the New York Times. “Just goes to show, you shouldn’t have a knee-jerk reaction to anything that comes across Twitter.”
“It’s a huge drop in such a short period of time, and it could only have been due to some type of huge flight to quality resulting from geopolitical concerns,” said the managing director at Deutsche Bank Asset & Wealth Management to the Wall Street Journal. “An explosion at the White House that was rumored to have occurred would certainly be a good example of something like that.”
At the same time as the DJIA was nosediving, the price of crude-oil futures fell on the New York Mercantile Exchange, though nowhere near as badly as what happened at the Stock Exchange.
“That sort of stuff gets our attention, as you can imagine,” explains one broker, adding, “but it was immediately met with skepticism.”
While today’s incident ultimately had little impact, it does demonstrate how quickly — and not always wisely — the public can react to only a single sentence, especially when it comes from what is generally considered to be a trusted news source.
In a way, it’s good that the bogus AP Tweet was about a [fictional] incident at the White House, as it was easy for other media outlets to report the truth and dispel rumors almost immediately. However, had the hackers Tweeted about something harder to confirm — like a military incident in North Korea or a Deepwater Horizon-like disaster offshore — it may have gained traction and had a longer-lasting result.