Volatility spiked and markets plunge on a false tweet.
First the scoreboard:
Dow: 14,718, +151.7 pts, +1.0%
S&P 500: 1,578, +16.2 pts, +1.0%
NASDAQ: 3,269, +35.7 pts, +1.1%
And now the top stories:
- There was a scary moment during the early afternoon trading. At 1:07 PM ET, the Associated Press’ Twitter account sent out a false tweet with the text “Breaking: Two Explosions in the White House and Barack Obama is injured.” Brokers immediately alerted their clients and traders instantaneously dumped stocks and the markets collapsed. But seconds later, other folks at AP quickly revealed that their accounts had been hacked. The markets quickly bounced all of the way back.
- This episode “will prove a good test of the positioning of the markets,” wrote Société Générale FX strategist Sebastien Galy in an email to clients. “You now have the sensitivity of the markets to a large negative (fictitious) shock from which to deduce the positioning of the market.” We now know that the market is very long on the stock market.
- The market’s resiliency today was particularly notable considering the disappointing data that we got. Over night, China’s Flash Manufacturing PMI fell to 50.5, which was much lower than the 51.5 level economists were looking for. It would appear that the world’s second largest economy is growing more slowly than expected.
- The US Flash PMI also missed estimates, falling to 52.0 from last month’s reading of 54.9. Economists were looking for 53.9.
- Some experts, like Stifel Nicolaus’ Dave Lutz, attribute the market’s strength to the idea that Germany will capitulate and allow the ECB to expand its easy monetary policy.
- Apple and Yum! Brands announce earnings after the closing bell. Follow their results live at BusinessInsider.com.
- Don’t Miss: A Driller Gave Us This Up-Close Look At A Rig That’s Tapping The Marcellus Shale >