Hoax AP White House tweet tests firms scouring social media | Investing | Financial Post

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A tweet reporting explosions at the White House appeared on the Associated Press’s official feed Tuesday afternoon, sparking a temporary sell-off that briefly wiped out about US$140 billion in market value on the S&P 500.

Duane Tilden‘s insight:

Tuesday’s fateful tweet appeared at 1:07 p.m. EDT. It was picked up almost immediately by investors and analytic companies scanning Twitter for key words to determine breaking news or measure sentiment. Stocks and commodities moved sharply lower and bond prices soared.

Within minutes, analytics firm Dataminr issued an alert saying the AP account was probably hacked, citing another tweet by a reporter in the White House basement.

“We see this every time this type of news comes out: liquidity evaporates quickly. High-frequency traders cancel their orders on even one little tweet,” said Dennis Dick, a trader at Bright Trading LLC in Las Vegas.  Freeling-Wilkinson said analytics firms like his are more interested in looking at trends than individual tweets.  “I would never recommend that anyone trades on a single tweet,” he said.

See on business.financialpost.com