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.

Article continues below.
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



Wed.     Thur.

Month chg.

YTD chg.
Crude oil (-CL)

$84.44

$88.71

-2.09%

-14.56%
(per barrel)











Heating oil (-HO)

$2.9621

$3.0529

-3.27%

1.64%
(per gallon)











Natural gas (-NG)

$3.5780

$3.6170

-3.09%

19.71%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.5889

$2.6989

-1.57%

-2.58%
(per gallon)











Brent crude 

$106.82

$111.07

1.08%

-0.52%
(per barrel)











Retail gasoline

$3.4620

$3.4630

-1.68%

5.68%
(per gallon; AAA)












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



Wed.

Thur.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0900%

0.090%

-18.18%

800.00%
5-year Treasury note 

0.662%

0.744%

-7.41%

-20.24%
10-year Treasury note

1.632%

1.742%

-3.20%

-12.77%
30-year Treasury bond

2.821%

2.916%

-1.05%

-2.35%
Currencies











U.S. Dollar Index

80.867

80.843

1.10%

0.43%
British pound

1.5995

1.6000

-0.88%

2.94%
(in U.S. $)

 








U.S. $ in pounds

£0.625

£0.625

0.89%

-2.86%
Euro in dollars

$1.28

$1.28

-1.48%

-1.44%
(in U.S. $)

 








U.S. $ in euros

€ 0.783

€ 0.780

1.50%

1.46%
U.S. $ in yen 

80.13

80.39

0.41%

3.93%
U.S. $ in Chinese

6.27

6.24

0.52%

-0.95%
yuan











Canada dollar

$1.004

$1.008

0.40%

2.37%
(in U.S. $)

 








U.S. dollar 

$0.996

$0.992

-0.33%

-2.32%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,714.00

$1,715.000

-0.30%

9.39%
(per troy ounce)

 








Copper (-HG)

$3.4415

$3.506

-2.16%

0.16%
(per pound)

 








Silver (-SI)

$31.661

$32.034

-2.03%

13.42%
(per troy ounce)

 








Wheat (-ZW)

$8.940

$8.770

3.41%

36.96%
(per bushel)

 








Corn (-ZC)

$7.4425

$7.410

-1.52%

15.12%
(per bushel)

 








Cotton 

$0.6983

$0.701

-0.34%

-23.83%
(per pound)

 








Coffee

$1.5120

$1.506

-2.23%

-34.16%
(per pound)

 








Crude oil (-CL)

$84.44

$88.710

-2.09%

-14.56%
(per barrel)










 

1626Comments
Nov 7, 2012 5:52PM
avatar

===Where are the usual Right Wingers, they are all gone I don't see the usual folks.  Come out come out wherever you are. ====

 

they're either hiding under thier rock or changed their name.

 
LOL
Nov 7, 2012 5:51PM
avatar
well we are not going to be hiring,we are laying off employees.we can keep it simple and pay 0 on insurance to workers and not paying xtra on taxes. don't look us up for work we are not hiring.we cannot afford our workers.(thank you obamaman for helping us with keeping the depicit down.well you can add our workers to your food stamp program.) nice guy,i didnot drink obama kool-aid. i am a hard worker for 40 years and just got by,instead of buying a house and a new car i gave jobs but i cannot afford insurance for everyone,i have taken a loss for 4 years and i am currently paying thru my nose to keep my workers busy.i cannot do it any more. i am 55 years old and never owned a house or a new car.i thought things would turn around but they didnot and they are'nt going to either it's time to give up and think of myself before it's to late for me my gross income is 26,000 my workers made more than i do,it does not pay to do good things any more.
Nov 7, 2012 5:51PM
avatar
Health Insurance Companies should never be selling shares of stocks in their companies, they could invest but not share, for those companies do not build physically anywhere but the home office and they simply don't create tremendous employment, two of the reasons to be traded publicly.  If you sell shares in health insurance companies they rates for the health insurance will always have to go up to pay the dividend checks back to share holders instead of paying the doctors and hospitals what they deserve.  So all you cry babys must have had a lot  shares in health insurance so you rather your dividend checks get larger they your nephew get the treatment he needs for cancer.  You live high on hog nephew dies a slow painful death.  That is what you want.
Nov 7, 2012 5:50PM
avatar

Gotta make back the money they lost while campaigning for their political parties so they sell off their loser stocks. Some win some lose.

Nov 7, 2012 5:50PM
Nov 7, 2012 5:50PM
avatar
Hey Plastic,
     What are you gonna do when the white half of Obama takes over for the next four years since you hate whites so much. He's just as much white as black you know, however you and your hairbrain liberal media will lie about anything to try to support your hand it to me agenda.
  Go back under your rock, maybe a shovel ready project will pick you up.

Nov 7, 2012 5:50PM
avatar

This is for the voters who are helping history to repeat itself.....by voting with NO knowledge of who and what they are actually voting for:

 

 

 Thomas Jefferson knew because he himself studied the previous failed attempts at government. He understood actual history, the nature of God, his laws and the nature of man. That happens to be way more than what most understand today. Jefferson really knew his stuff. A voice from the past to lead us in the future:

The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.
Thomas Jefferson

It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.
Thomas Jefferson

I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.
Thomas Jefferson

My reading of history convinces me that most bad government results from too much government.
Thomas Jefferson

No free man shall ever be debarred the use of arms.
Thomas Jefferson

The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.
Thomas Jefferson

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.
Thomas Jefferson

To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.
Thomas Jefferson

Thomas Jefferson said in 1802:
I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property - until their children wake-up homeless on the continent their fathers conquered.

Nov 7, 2012 5:49PM
avatar
Maybe Obama will make it so his minions can buy GM stocks with food stamps!
Nov 7, 2012 5:49PM
avatar
I know you are not surprised by this, it happens after every election. The only difference is that this time is not speculation, is a fact.
Nov 7, 2012 5:49PM
avatar
You will soon see previously undisclosed layoffs from Boeing, Lockeed, Caterpillar and the auto industry.  Where are the Obama supporters now.  Unemployment is about to rise again.  When will all of you get more pragmatic and listen???????
Nov 7, 2012 5:48PM
avatar

What if we were to start bartering more, pull slowly out of the markets and thus reduce our income, essentially we will be saving more and reducing tax revenue that is to be supporting all of these Obama supporters.  The only way we can put a clinch on them (BO supporters) is to reduce income tax intake and therefore freecare to the loafers that don't want to work

Nov 7, 2012 5:47PM
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Well, at least half the country saw this coming.....
Nov 7, 2012 5:47PM
avatar
Market should bounce back tomorrow, especially oil. ingeniousinvesting.com
Nov 7, 2012 5:47PM
avatar

For those of you who stole under the guise of 'Wall Street economics' your thievery is ending. You will finally be able to look into the mirror and say "I was wrong to fleece America for my own little pittance and i will not do it again."

 

 

Mind that you do!! 

Nov 7, 2012 5:47PM
avatar
Bye, Bye  American Pie!! Going to Watch Ovomit raise our taxes, while you wait in Line (for food). Even if it means you are going to loose your job and never see freedom again.  

This was written before it happen, so it no surprise.  Now the one's voted for him has the mark.  Get ready of 4 years of Hell.  I am ready, I hope all the other 47%ers  are ready.  They forgot who was forking the bill for all of those social services programs.  

I can not wait for the signs saying Brother Can You Spare Me A Dime.  How we forget history and the warnings of the future.  So Let It Be Written.  America most go through pain and suffering before they will come to their senses, they are not smart of enough through their Union run educational system to know any better.  It's just a shame and sin that it has to come to this.....
Good Luck to All of the Hard Working Americans!!!!!!! 
Nov 7, 2012 5:46PM
avatar
Someone Shut the #uck up and do some work.

You are the same person who predicted that Romney will win, so if you were wrong then,you are wrong now.

Accept our Democracy Shut the #uck up and be positive and do something you whining bitch.

That's an advice for Congress also John Boehner has to work with the President on passing a Budget, so it's time to stop being Bitches and it's time put on "Los Pantalones".
Nov 7, 2012 5:46PM
avatar
Thank you Obama.  You think the country is divided?  Your policies are bad for business and the market is showing it.
Nov 7, 2012 5:46PM
avatar

HEY---HEY, People that get free stuff don't care about stocks. Someone, PLEASE, pass me the Kool-AID

 

Nov 7, 2012 5:46PM
avatar
Look out!! The sky is falling!!  Oh wait, it isn't.

Nov 7, 2012 5:45PM
avatar

I WILL NEVER VOTE FOR A MORON MORMON WITH ALZHEIMER
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