False tweet causes jolt to US markets

THE POWER of social media yesterday collided head on with US stock markets after a false tweet suggesting Washington DC had been bombed caused share prices to briefly plummet.

“Breaking: Two Explosions in the White House and Barack Obama is injured,” appeared on the Twitter account of news agency Associated Press (AP) during afternoon trading after hackers gained access.

Within seconds the Dow Jones Industrial Average dropped by 145 points. Other markets immediately followed suit, with the oil price falling and the US dollar weakening against the Japanese yen. Traders responded by pushing up the price of gold by $5 an ounce.

Minutes later AP admitted the security breach and markets rebounded but the incident raised questions about the enormous potential influence of social media on the financial system.

Members of a group calling themselves the Syrian Electronic Army claimed responsibility for the hack, which appears to have followed a sophisticated phishing attack on AP’s computers. The group has previously praised embattled Syrian President Bashar Al-Assad.