Markets take dive after AP's Twitter account hacked
WASHINGTON -- Hackers took control of The Associated Press Twitter account Tuesday and sent a false tweet about two explosions at the White House that briefly sent U.S. financial markets reeling.
But by then, most U.S. markets had taken a plunge on the false news in what one trader described as "pure chaos." The benchmark S&P 500 dropped 14 points to fall as low as 1,563.03 before recovering, all in about five seconds. The Dow Jones industrial average temporarily dropped 143.5 points, or 0.98 percent.
The U.S. Securities and Exchange Commission is looking into the bogus tweet and its impact on the markets, SEC Commissioner Daniel Gallagher said.
"I can't tell you exactly what the facts are at this point or what we are looking for, but for sure we want to understand major swings like that, however short it was," Gallagher said.
Reuters data showed the tweet briefly wiped out $136.5 billion of the S&P 500 index's value before the markets recovered. All major indexes ended up for the day.
Some traders attributed the sharp fall and bounce-back to automatic electronic trading.
A group calling itself the Syrian Electronic Army, which is supportive of that country's leader, President Bashar al-Assad, during the two-year civil war, claimed responsibility yesterday on its own Twitter feed for the AP hack. The group has done so after similar invasions into the Twitter accounts of National Public Radio, BBC, CBS' "60 Minutes" program and Reuters News.
A Twitter spokesman declined to comment on the breach, citing privacy and security reasons. An FBI representative had no immediate comment.
"There's plenty of blame to go around," said Stewart Baker, a cybersecurity lawyer at Steptoe & Johnson in Washington. "AP should have had better passwords, Twitter should have gone to at least optional two-factor authentication months ago, and guys on the Street really should be thinking twice before they trade on Twitter reports."
The AP confirmed that its Twitter account had been suspended and said it was working to correct the issue.
The news service has said hackers made repeated attacks before yesterday's incident to steal the passwords of AP journalists.