Flash Crash Over AP Tweet Hoax Eyed

Morning Business Memo…

A weird thing happened to the stock market last week, and now financial regulators want to know if something much worse could cause a crash in the future. Someone hacked the Associated Press Twitter account and tweeted that President Obama had been injured in an explosion at the White House. Seconds later the Dow Jones index - which had been up during the day - plunged 136 points. The market recovered minutes later but the New York Times reports "the episode has heightened concern among regulators about the combination of social media and high-frequency trading." The Commodity Futures Trading Commission has scheduled a public meeting this week with high-frequency traders to discuss whether there should be more safeguards to protect against the effects of social media on markets. In recent years the volume of high frequency trades, triggered by algorithms, has rapidly expanded and could be a source of dangerous instability in financial markets.

The bottom line at most large corporations is in good shape with stronger-than-expected results during the current quarterly reports season. But the top line is another matter. Sales are flat at many big companies, hurt by the recession in Europe and cautious spending by US consumers. Thompson Reuters projects that first quarter revenue declined 0.3% at the companies in the S&P 500 index.

Is US economic growth slowing down this spring, or are housing and auto sales helping to warm things up? Some answers may come this week with a series of economic reports. This morning the Commerce Department releases its survey of incomes and spending. In the past few years middle class living standards have been flat. But many people at the lower end of earnings have seen their incomes decline. Also today, the National Association of Realtors will release the pending home sales index for March. Automakers release their monthly sales numbers of Wednesday. The Federal Reserve gives its view of the economy on Wednesday and The Labor Department will release the April employment survey on Friday.

The Environmental Protection Agency has dramatically lowered its estimate of how much of the potent heat-trapping gas, methane, leaks during natural gas production. The shift could have major implications for a debate that has divided environmentalists: Does the recent boom in fracking help or hurt the fight against climate change? There have been differing scientific estimates of the amount of methane that leaks during production and delivery. Methane is the main component of natural gas.

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc

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