[ by Melanie Gretchen ]

No tech glitches; No fat finger errors.  Instead, a Twitter Diversion.

Never underestimate Twitter's 140-word limit.  Yes, "BIG THINGS come in small packages.  

On Tuesday - for one brief, but effective moment - the world's leading markets panicked upon reading a fake tweet that reported White House explosions had injured the President.  The value of the markets fell $136 billion in 2 minutes, then recovered as cooler heads prevailed.

A fat finger error it was not, à la our Behind the News story, [Google Tumbled By Fat Finger Trade].  Instead, the Syrian Electronic Army reportedly claimed responsibility for hacking the Associated Press's Twitter account on Tuesday.  While AP issued these fake tweets, no such news was reported from either Bloomberg or Reuters.

At the time the Tweets went live - 1:07 p.m. ET, ...  the S&P 500 was up about 1%.  The AP Twitter account announced explosions at the White House and the injury of President Barack Obama.  By 1:10 p.m., the benchmark guage for American stocks erased almost the entire gain, falling as low as 1,563.03  Although the index recovered within 2 minutes, once the news service announced it had been hacked and there were no explosions, $136 billion is nothing to sneeze at.  The market fluctuations caused losses on many trades, while others took gains.  

Across the market, the DJIA dropped 145 points before recovering, while Exxon Mobil, Apple, Johnson & Johnson and Microsoft all taking 1% hits in thoes 2 minutes.

Time for Another Digital Revolution?   In the aftermath, market makers said they were shaken up by the tweet's impact.  Not so long ago, the 5/6/12 Flash Crash erased $862 billion in market value in less than 20 minutes.  Since then, regulators and exchanges have been working on altering the speed bumps adopted after that incident toward boosting confidence as the markets gets faster and more complex over the last decade.  Granted, $136 billion isn't anywhere near the hole the Flash Crash left momentarily, but the impact is certainly reverberating.

"It’s one thing for an illiquid stock to do that but how does a multitrillion-dollar market do that?  That’s very disturbing to me. It’s unnerving." -- Walter Todd, who oversees about $940 million as chief investment officer of Greenwood Capital Associates LLC in Greenwood, South Carolina, said in a telephone interview

For further details, go to [Bloomberg, 4/23/13] and [Reuters, 4/23/13].