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AP Twitter hack sends DOW into nose dive
SCHENECTADY -- The Standard & Poor’s 500 Index lost an estimated $136 billion of its value after a hacker used the Associated Press Twitter account to falsely report a bombing at the White House had injured President Obama.
The sell-off was started by algorithms, which began automatically searching social media earlier this month for news information that may impact stocks. After the algorithms determined the AP Tweet to be false, the program corrected itself and the market rebounded.
“It's program trading that's out there now and these programs search the web and they look at words and tweets and a combination of these trigger an algorithm to occur and we have a sell off,” explained William Mack with PlanMember Securities. “This was not investors saying I’m going to sell my stock today, this is really program trading and this shows how dangerous this is. You have some of these people, these clowns that are out there thinking this is a prank, something that we’ll all have a laugh about, it isn't funny at all.”
Earlier this month, the Security and Exchange Commission allowed algorithms to search and make decisions off of social media. Although Wall Street corrected the sell-off within minutes, but Mack says it is possible the SEC will review and possibly suspends its policy until additional safety measures are taken by Twitter.
“This is the internet and to rely on any one source of information wherever it comes from and to rely on one source of information wherever it comes from is extremely dangerous in today's market,” said Mack.
The hack came about week after people on social media sites incorrectly identified suspects in the Boston Marathon bombings. Experts in social media hope these incidents will lead to more skepticism online.
“Even though this did come from a hacker and that's who is most at fault for this, the public needs to be more skeptical, more discerning with what they're seeing on Twitter,” said Allison Turcio, Associate Director of E-Communications at Siena College.
Siena uses social media as part of its emergency management plan, which calls for tweets and posts to go up to keep students, staff and the public informed during a crisis
“We have Twitter built into our emergency planning at Siena because you’re trying to get the word to get the word out in that immediate way and we're trying to reach our students to let them know something is going on,” said Turcio. “It’s a shame that something that can be used for so much good is being used in such a malicious way by this hacker.”