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Wednesday, April 24, 2013

The Tweet that rocked Wall Street: $200 billion lost on fake message

A single hoax message sent via Twitter, the social media platform, erased billions of value from US stock markets on Tuesday, drawing attention to an electronic Trojan horse that hackers may manipulate with apparent ease.
A picture may contain a thousand words, but a single fake tweet can blow a hole in financial markets in seconds.

That was the costly lesson learned on Tuesday as a tweet allegedly from the Associated Press went the global rounds just before 1:08 p.m., reporting two explosions in the White House and that President Barack Obama had been injured.
Within minutes AP personnel swung into damage control, attempted to reassure the tweet was a hoax. But the damage was already done: The bogus message sent the Dow Jones Industrial Average into a tailspin, shaving 150 points, or about 1 percent, in the blink of an eye.
The fake Tweet dealt a hammer blow to other markets as well: The S&P 500, the NASDAQ and crude oil all dropped 1 percent. The S&P 500′s losses alone wiped out about $136.5 billion, according to Reuters; the broader market lost nearly $200 billion in value, USA Today reported. At the same time, the yield on the 10-year US Treasury note fell 4 basis points, and the CBOE Volatility Index – the so-called ‘fear index’ – surged 10 percent.

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