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Alternative Market Briefing

Fake AP Tweet: Not much can be done about bogus bad news

Thursday, April 25, 2013

Benedicte Gravrand, Opalesque Geneva: - Tuesday's mini sell-off following a fake tweet has led to renewed questions as to whether high frequency selling is harmful to the financial markets and whether manipulation through social media can be stopped or regulated. Meanwhile, Twitter is working on its own security protocol.

On Tuesday at 1:07 p.m. EDT, a tweet on the Associated Press (AP)'s Twitter feed announced "Breaking: Two Explosions in the White House and Barack Obama is injured." This was, needless to say, re-tweeted dynamically. The Dow Jones industrial average plunged 145 points, and investors unloaded around $134bn worth of stocks.

But then, people realised it was fake news and the markets recovered quickly. The rebound started at 1:10 p.m., when word began to circulate that the AP tweet was a hoax and the White House was unharmed, said the Washington Post. A chart on how the market reacted can be seen here.

Computer programs According to the Seattle Times, most of the investors dumping stocks weren’t human, they were computers.

"Before you could blink, it was over," Joe Saluzzi, co-founder of Themis Trading and an outspoken critic of high-speed computerized tra......................

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