Markets blip over hacked AP tweet

Sell-off followed by swift recovery

Bloomberg NewsApril 23, 2013 

— The Associated Press, one of the world’s largest news agencies, said Tuesday that a hacking attack caused it to send out an erroneous Twitter post that sent markets down 1 percent in a matter of seconds.

The false information about explosions at the White House and President Barack Obama being injured came after repeated attempts by hackers to gain access to AP reporters’ passwords, the news agency said in a report. It said it had suspended its account and would work to fix the vulnerability.

The Dow Jones industrial average and the Standard & Poor’s 500 Index each fell about 1 percent before rebounding. A separate Twitter account operated by the AP’s corporate communications team followed up minutes later with its own message: “That is a bogus AP tweet.”

The news agency is the latest victim in a series of hacking cases against news outlets, including the New York Times and the Wall Street Journal. The errant tweet spooked investors eight days after two explosions struck the Boston Marathon.

The false tweet spotlights the increasingly close ties between social media and financial markets. The AP’s main Twitter account, AP, had more than 1.9 million followers before the hacking.

The incident shows the risk of social media, said Cathy Baron Tamraz, chief executive of Berkshire Hathaway’s Business Wire. Tamraz called it an “object lesson” in why social media isn’t a substitute for press releases.

“I’ve got over 100 technologists in my shop,” said Tamraz, whose company distributes news releases for corporate clients. “What they spend their time doing is figuring out what the bad guys want to do and preventing them from doing it. That’s the kind of thing I don’t think these social sites were even set up to do.”

Ed Donovan, a spokesman for the Secret Service, which provides protection for the president, said the agency will take any appropriate follow-up steps. He declined to give specifics.

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