SUMMARY
This is AI generated summarization, which may have errors. For context, always refer to the full article.
MANILA, Philippines – When fake tweets of explosions and an injured president strike the Internet, it’s the human nature of fact-checking that trumps the technology of computerized stock-trading.
Following the hijacked Associated Press Twitter account that sent out a false tweet of explosions at the White House, Bloomberg tells the story of how stocks recovered from a fall following the ill-made tweet.
Bloomberg’s report highlighted members of the trading industry who learned to not let automated trading do the work of the human mind. In one case, Jonathan Corpina, a senior managing partner with Meridian Equity Partners Inc., told Bloomberg Radio that he immediately checked the tweet against a client who works two blocks away from the White House.
Corpina told Bloomberg that his client said, “I’m staring at the White House and there’s nothing going on here right now.”
The selloff that precipitated the short, sharp fall, may have been caused by two factors. The first is the prevalence of stop-loss orders, which Bloomberg explains “are placed by investors to automatically sell stocks when declines of a specified threshold are reached.” Combined with traders’ computerized algorithms that played against each other, the potential for further trouble could have been disastrous.
The Standard & Poor’s 500 Index ended the session up 1 percent at 1,578.78. The Dow Jones Industrial Average (INDU) lost about 145 points before recovering, ending 152.29 points higher at 14,719.46.
“This was just a rumor and there have been lots of rumors over the years that moved prices until people get some confirmation that it was or wasn’t true,” said John Carey, a fund manager at Boston-based Pioneer Investment Management Inc. “I would guess that would have just been the beginning of some market drop if it had been a true story. But thankfully it wasn’t.” – Rappler.com
Add a comment
How does this make you feel?
There are no comments yet. Add your comment to start the conversation.