Dow slumps 313 after Obama's re-election

Investors fear failure to fix the fiscal cliff will lead to recession. European stocks slump after ECB President Draghi says even Germany is weakening. Apple has fallen 20% since September. Bank and energy stocks fall. Oil and gold slip.

By Charley Blaine Nov 7, 2012 1:45PM
Charley BlaineUpdated: 8:32 p.m. ET

A day after President Barack Obama won a second term, stocks suffered their worst beating in nearly a year.

Late selling caused to the Dow Jones Industrial Average ($INDU) to finish down more than 300 points, its largest loss since Nov. 9, 2011. The blue-chip index ended the day below 13,000 for the first time since Aug. 2, and the major U.S. averages were all down at least 2.4%.

Bank stocks were the weakest sector in part because it's likely the Dodd-Frank financial reform bill will remain largely intact. In addition, Elizabeth Warren, a critic of many U.S. banking practices, won a seat in the U.S. Senate. JPMorgan Chase (JPM), a critic of bank regulation, was down $2.32 to $40.56. Health insurance stocks were lower because the  Patient Protection and Affordable Care Act Reform Act -- aka Obamacare -- is likely to stay in place.

Meanwhile, oil prices fell back sharply in part because of worries about global demand. Europe became a worry after European Central Bank President Mario Draghi said he expected no change to the weak eurozone economy in the near future. Worse, he said, the weakness has begun to affect Germany. European stocks immediately sold off -- and sharply, too. The dollar rose against the euro and British pound.

The Dow closed down 313 points to 12,933, its lowest close since July 26. The Standard & Poor's 500 Index ($INX) slumped 34 points to 1,395, its first close below 1,400 since Aug. 6. The Nasdaq Composite Index ($COMPX) dropped 75 points to 2,946, its biggest loss since Nov. 9, 2011.

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The Nasdaq-100 Index ($NDX) had fallen 68 points to 2,613.

And that brings us to Apple (AAPL), which represents some 17% of the Nasdaq 100's market capitalization and roughly 4% of the value of the S&P 500. The stock is off $22.20 to $558. That's down 20.9% from its intraday peak of $705.07. Selling in the shares accelerated this morning when the stock hit $564 -- 20% below that intraday high.

After the close, however, Qualcomm (QCOM), the big maker of chips used on mobile phones, forecast fiscal first-quarter sales and profit that exceeded analysts’ estimates as it increases production of its most expensive chips. Shares were up $4.78, or 8.2%, to $62.90 after hours after falling $2.25 to $58.12 in regular trading.

Crude oil takes a dive
Crude oil (-CL) in New York settled down $4.27 to $84.44 a barrel. Brent crude was off $4.36 to $106.71. One reason for the decline was the decline in coal prices and coal stocks, a reaction to the election.

The national average retail price of gasoline fell to $3.462 a gallon from Tuesday's $3.463, according to AAA's Daily Fuel Gauge Report.

Gold (-GC) settled down $1 to $1,714 an ounce. Silver (-SI) fell 37 cents to $31.66 an ounce. Copper (-HG) fell 6.5 cents to $3.441 a pound.

Interest rates fell as the dollar moved higher. The 10-year Treasury yield fell to 1.632% from Tuesday's 1.742%.
Energy prices -- New York close

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A tough road ahead for Obama, Congress
Today's slump is reminiscent of what happened the day after Obama won the 2008 election. The Dow fell 486 points that day and 443 points the next.

The bottom line on the sell-off is Obama will get no honeymoon from his re-election. He and Congress face the potential that doing nothing about the fiscal cliff -- the witch's brew of tax increases and spending cuts due to kick in after the New Year -- will cause the economy to slide back into recession, as many economists claim.

Ratings agency Fitch Investors warned today that the U.S. probably would lose its AAA credit rating if the administration and Congress don't address the problem.

"The economic policy challenge facing the president is to put in place a credible deficit-reduction plan necessary to underpin economic recovery and confidence in the full faith and credit of the U.S.," a company statement said today. 

Is a rally forming?

Maybe. It's true that the Dow and the Nasdaq closed the day below their simple moving averages. That's a signal that the market is headed lower, and there was lots of chatter to that end today.

At the same time, the relative strength indexes for the Dow, S&P 500 and Nasdaq are all under 30. When these indicators drop below 30, that suggest the market overall is oversold and could be ripe for a rebound relatively soon.

In late May, the the RSI for the three indexes fell below 10. The market bottomed on June 4, with the Dow jumping about 12.5% up through Oct. 5.

That is, admittedly, is a technical view. What won't help markets are the riots today in Greece at the end of a two-day general strike called to oppose a €13.5bn ($17.2 billion) package of cuts demanded by the European Union, the European Central Bank and the International Monetary Fund in return for a financial lifeline to prevent the government running out of money.

Thursday brings the weekly report on jobless claims and the September report on the nation's trade balance. The key earnings report comes after the close from entertainment and media giant Walt Disney (DIS). Also reporting: Wendy's (WEN), Kohl's (KSS), Zipcar (ZIP) and Boingo Wireless (WIFI).

There may be a bounceback rally. Futures suggests the Dow will open 50 points higher, with the S&P 500 up 5 points and the Nasdaq-100 up 9 points.

A big, bad loss

This was a day when stocks that might have done well under a Romney administration were clobbered: defense, coal, oil and gas, health insurers, steel, banks and broker. And everything else seemed to run over with them.

One group that did remarkably well: gun makers as investors speculated an Obama administration attempt to regulate gun selling more closely. Sturm Ruger (RGR) jumped $3.04 to $47.68. Smith & Wesson Holding (SWHC) surged 91 cents to $10.37.

All 30 Dow stocks were lower, but 109 points of the index's loss was concentrated in five stocks: Caterpillar (CAT), IBM (IBM), Exxon Mobil (XOM), Chevron (CVX), and JPMorgan Chase. 

The best Dow performers, relatively speaking: Walt Disney (DIS), Wal-Mart Stores (WMT) and Johnson & Johnson (JNJ). The biggest percentage losers were Bank of America (BAC), JPMorgan and Hewlett-Packard (HPQ).

Only 28 S&P 500 stocks were higher, led by Tenet Healthcare (THC), JDS Uniphase (JDSU) and Time Warner (TWX). Coal-producer Peabody Energy (BTU), investment bank  Morgan Stanley (MS) and health insurer Humana (HUM) were the laggards.

Only six Nasdaq-100 stocks were higher, led by Netflix (NFLX) , News Corp. (NWSA) and medical-equipment wholesaler Henry Schein (HSICResearch In Motion (RIMM) and for-profit education company Apollo Group (APOL) were the laggards.

Research In Motion fell 82 cents to $8.24 after Pacific Crest Securities analyst James Faucette wrote that the company's BlackBerry 10 operating system would be 'dead on arrival" when it comes to market early 2013.

Short hits from the markets -- New York close



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€ 0.783

€ 0.780


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Crude oil (-CL)




(per barrel)


Nov 7, 2012 8:45PM
STOP CRYING YOU LOSERS! it's time for Mitch and his cronnies to get off the pot and get with the program instead of wasting the last two years deadlocked because he doesn't  like  Obama. I didn't vote for Obama FYI.. nor did I  vote for Romney.  It didn't make any  difference to me if   the president and the congress can't compromise. Both sides of the aisle need to shape up or get shipped out!
Nov 7, 2012 8:42PM

Well I've grown weary...Even after a nap earlier....It was a Great Celebration last night..


And I have some financial balancing to do...

You guys are very,very busy on here.



Yup 4 more years....

Nov 7, 2012 8:41PM

Fox News truly is ......Unfair and Unbalanced........Think about that......That's Fox's viewership.......
Nov 7, 2012 8:39PM
Our OPEN BORDER POLICY has came back to bite us hard! We have turned a blind eye and even given the illegal's work, and all we get in return is our conservative votes rendered useless by the very people that we are being kind to! This is the thanks we get, by them voting against us! Seems like that we should watch who we hire. They vote DEMOCRAT and then work for CASH ON THE SIDE!!  They live with their women instead of marrying them so that they can get all of the GOVERNMENT HANDOUTS! This must be stopped at all cost.
Nov 7, 2012 8:38PM
I find it interesting, looking at the electoral maps of the election, all the producers in this country, the heartland, they all voted against Obama. Yet all the consumers, big cities, and the coasts, all voted for Obama. Even look at Ohio or California maps, and it plays out inside those states that went to Obama. How long can you bite the hand that feeds you? 
Nov 7, 2012 8:37PM
WIT.........Nor for "Fair and Balanced" either.
Nov 7, 2012 8:35PM

My oh, my Classic......I've got them and as an old man, they keep getting bigger everyday...

They are displacing something else..Think it happens with the elders..??

Nov 7, 2012 8:35PM
Hey Republicans ..........Do you now believe the Rasmussen Polls? L MAO ..  Corrupted polling, just like Fox News.......Do yourselves a favor republicans, start getting your information from other sources....At least check other places to verify....... Fox news is NOT THE PLACE FOR FACT,TRUTH and REALITY.....

If you were looking for Fox News in a Library you would have to go to the FICTION section....
Nov 7, 2012 8:32PM
Ooops...JK woke up and posting for free now....Library just let him in...the computer area.
Nov 7, 2012 8:31PM

Curious how the re-election of the administration that oversaw a 7000 point increase in the market would cause a 300 point drop. In another time, it would have been a cause for celebration.  The smart money boys must be in  quandry. Obviously things did not go according to plan. Though they seemed very happy to profit from the Obama/Fed induced run-up they seem to be thinking that all that is coming to an end.  Add to that the possibility that dividend and cap gains might go up on Jan 1, there could be a reckoning coming.


I've been out of this market for a long time because it hasn't made sense for years.  Maybe it's about to "adjust" back to where it should be.



Nov 7, 2012 8:30PM
 To the Obama Bashers: Ha Ha Ha I win and YOU lose. Here's rubbing  your damned faces in it. Oh yeah! Rub rub rub!
  Where's that idiot who said  Mitt would win every swing state but NV while I said Obama would win every swing state except for NC. I was right and YOU didn't know what the hell you were talking about and you never will simply because you do not possess the necessary neural connections to have good logic skills. Rub rub rub, Obama Hater get back to watching NASCAR
Nov 7, 2012 8:30PM

The America I love was lost last night. In it's place we have a country of people who expect government to provide basic needs that in the past we had to work for. As a result I am going to cut spending and increase my IRA contributions to the max to limit my taxable income. I will try in every way possible to limit my part in the National economy. I will work to provide for basic needs but no  longer have the desire to help the economy improve in any way. If Americans want failure let them have it. I used to buy American made products whenever possible even if they were more expensive. Now I will join the ranks of cheaper no matter where it is made. America will never be what it was and will fail because of the what can you do for me electorate.  

Nov 7, 2012 8:29PM
Funny how all the ignorant, hateful republicans seemed to have forgotten the smirking chimp bush, who had to steal the election twice, and the country was never more divided then when that village idiot was in office.  How convenient to have selective memory. 
Nov 7, 2012 8:27PM
This disaster, along with many others in the economy and foreign policy, belongs to Barack Hussein Obama!
Nov 7, 2012 8:27PM
vote, vote early and vote often! Your vote matters unless its an absentee ballot then it may or may not be counted before election is over! Too Bad, So Sad, now lets hurry up and do nothing that matters, except maybe social issues and more social programs.
Economy and American Dominance are a thing of the past.
Nov 7, 2012 8:25PM
$1 Trillion for invading Iraq----Waste of $ but no comments from you Republicans.  Just think of that $ staying in country.  Serves you righties right!!!!!!!
Nov 7, 2012 8:24PM
the last time a barrel of oil was below $85, we were paying less than $1.50 a gallon. WTF??
Nov 7, 2012 8:22PM

Proven fact per "REPUBLICANS" three out of 5 voters are dumb, misinformed and only watch the republican channel!!!


Why is it that two of the richest men on earth looked at Romnesia policy and said " This doesnt make any sense!!!  Dont believe me, look for postings by Michael Bloomberg and WARREN BUFFETT, well you wouldnt know that because you only watch the republican channel.  Also how do we go from a -9GDP that a REPUBLICAN created BUSH, to a +2??? and  how is it that 2% growth is not enough?? If you are a business owner like I am then you have three scenarios, one you go broke, two you break even or three, you have a 2% growth. I'll take 2% ANYDAY!!  people % means absolutely NOTHING, do you know what 2% equates too? Can be any number 500k+/-.   Also job growth on a monthly basis!!!  not 200k but anything in the 100k a month is great to me.  Maybe if george bush would have gone ou to campagn for romney, it would of helped or better yet where was sarah palin, ooops byron?  Someone was censored, hmmm wonder why he was censored!!!!  Read REAL statistic numbers from ADP direct, not **** you see on the comedy channel, oops I meant fox.

Nov 7, 2012 8:21PM
And the whole World was watching.....Actually we probably should have Poll Watchers from Foreign Countries....Like we do to others....Maybe start down in that panhandle State..??
Nov 7, 2012 8:21PM
Boehnner to Nordquist. Screw your no new tax pledge Pudge Boy!. And the GOP purge of the Tea Party begins.  I KNEW it would be a great show!
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[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 shed less than a point, ending the week higher by 1.3%, while the Dow Jones Industrial Average (+0.1%) cemented a 1.7% advance for the week. High-beta names underperformed, which weighed on the Nasdaq Composite (-0.3%) and the Russell 2000 (-1.3%).

Equity indices displayed strength in the early going with the S&P 500 tagging the 2,019 level during the opening 30 minutes of the action. However, ... More


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