Associated Press Fake Tweet Sinks The Stock Market

The Associated Press (@AP) tweeted on Tuesday, April 23, news that there were two explosions in the White House and President Obama was injured. Meanwhile, AP staff immediately debunked the fake tweet citing that the hacker did not write the report in “AP style”. AP also used their other Twitter handles to falsify the report. The AP Twitter account has since been suspended.

“The @AP Twitter account has been suspended after it was hacked,” tweeted AP White House correspondent Julie Pace. “The tweet about an attack on the White House was false.”

The AP reiterated that it had been hacked in a press advisory: “@AP Twitter account has been hacked. Tweet about an attack at the White House is false. We will advise more as soon as possible.”

Update: An AP article  meta-reports that AP got hacked after a phishing attack on its corporate network. One possibility is that a hacker sent an email to employee(s) tricking them into going to what looked like an official Twitter page and entering the company’s password.

The Syrian Electronic Army announced on Twitter that they were responsible for the hack along with the hashtag #ByeByeObama.

The breach in AP’s twitter sends the stock market into a steep downward spiral. They S&P 500 fell 14.6 points or 0.93 percent. It erased about $136.5 billion in value in less than three minutes right after the fake tweet hit the market.

Stocks have been climbing before the tweet as strong corporate earnings of Netflix, Travelers Companies and Coach were annoucned. By midday the stock market is recovering from the crash. Netflix (NFLX) gained 24.4 percent to $216.99; Coach (COH) gained 9.8 percent to $55.55; and Travelers (TRV) helped up the Dow with its 2.1 percent gain to $86.35. Right after closing, Apple climbed 4.9 percent to $425.95 immediately after the release of its Q2 earnings and announcement to double the returns to shareholders by 2015.

Twitter has announced plans to introduce a “two-factor authentication” option that would make it impossible to break into accounts – even if they acquired the passwords. In February, it reset the passwords on at least 250,000 accounts, after hackers broke into its systems and were suspected of accessing users’ data. But the two-factor authentication system has not yet been released. This is similar to Google (GOOG) and Facebook’s (FB) login authentication which requires the use of a second password delivered via text or call to enter the account.

Other instances of hacking on Twitter were accounts of CBS’ (CBS, Fortune 500) 60 Minutes and 48 Hours which were compromised over the weekend. In July 2011, News Corp.’s (NWS) Fox News account  tweeted that President Obama had been assassinated.

That same month, eBay’s (EBAY, Fortune 500) PayPal United Kingdom Twitter feed was hacked, and the profile photo was changed to a pile of excrement. Comcast’s(CMCSA) NBC News account was also compromised two months later, falsely tweeting that a plane had crashed into the Ground Zero area of Manhattan.

In February of this year, both the Burger King (BKW) and Jeep Twitter accounts were hacked during the same week.

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