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 7:29PM
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Any practical minded person knew the stocks market would fall if Obama won. Between Obama's 2013 taxes and new taxes I must pay in CA, voted in by more idiots, I will pay almost $4000 more in taxes next year, plus the continued increases in my self-employed health care plan with 50% coverage instead of 80%. Do you think I will make any big investments or spend on anything more than the basics? NO!. I am hoping my 2001 and 2004 cars will last 4 more years.
Nov 7, 2012 7:28PM
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Holy S#*T i must be a genius! Did i not tell all of you four months ago to buy guns and ammo? After listening for months to that idiot Re-Tog Re-Tog telling everyone how Obama made the stock market go to 13.5K and invest in Gold and silver, i CLEARLY said, and i quote," I don't know what gold or silver tastes like, but i'm sure it tastes nothing like hot lead". I made it perfectly clear that you should be investing in guns and ammo, and as of today i was right, as gun maker stocks as well as ammo company stocks were high enough to have made you enough money to retire on. For all you idiots that live in Ohio and here in Nevada that voted for Obama, you can stop whipping that dead horse of blaming Bush. This is all Obama from today on so suck it up and live with the consequences of his failures to come. When the civil unrest begins, you may not want to tell anyone you voted for a black hitler. 
Nov 7, 2012 7:28PM
avatar

For some of you that don't follow any Historical charts or Financial scenarios...

May have found reasons for a selloff today...

I actually expected a possible  300-400 pt drop...And then a mild recovery back to only 125-150 down.

So much for the retrace back up...But, let's wait a few days or a week or so.

There were some buying opportunities today....

And where is CGT1, was he a paid poster also.....??

Nov 7, 2012 7:28PM
avatar

How the stock market has behaved the day after recent presidential elections:

— Nov. 5, 2008: Optimism about an Obama presidency, which had fueled a 305-point rally the day before, gives way to postelection nerves during the financial crisis. The Dow Jones industrial average falls 486 points, more than 5 percent, to 9,139.

— Nov. 3, 2004: Wall Street celebrates the re-election of George W. Bush with a solid rally. A concession by John Kerry ends fears that the election would be fought in the courts. The Dow climbs 101 to close at 10,137.05.

— Nov. 8, 2000: A choppy trading session amid extraordinary political uncertainty. The postelection fight heads for Florida, and the Dow falls 45 to 10,907.

— Nov. 6, 1996: Voters deliver two more years of divided government, re-electing President Bill Clinton and returning Republicans to control of Congress. With the economy humming, that’s fine with investors. The Dow jumps 96 to 6,177.

— Nov. 4, 1992: Investors, having bid the market higher for a month in anticipation of a Clinton victory over President George H.W. Bush, cash in. The Dow falls 29 to 3,223.

— Nov. 9, 1988: A Republican victory fails to rally the market, and investors focus on problems for the new administration, specifically the trade deficit and a budget gap. The Dow drops nine to 2,118.

— Nov. 7, 1984: It may morning again in America, but something less than bright sun shines on Wall Street. The Dow falls 10 points — the equivalent of about 115 points today — to 1,233.

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As comicbook guy from the Simpsons would say - Worst president - ever!
Nov 7, 2012 7:27PM
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Wow shitty spelling, You Obbummer lovers can understand
Nov 7, 2012 7:26PM
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Must be dropping cause the companies that sell stock know we are ****ed fior thge next 4 years, thanks to all you idoits in the eastern states, CALIFORNIA AND A FEW OTHER TARDS

Hold on to your ankles America we ****ed ourselves AGAIN

 

Nov 7, 2012 7:26PM
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What a bunch of flippin cry babies.  The fact is, policies going all the way back to Reagan helped to tank our economy - can you say "deregulation"? I lost a job i'd held for 11 years on the day President O'bama was elected the first time, a job lost under the Bush administration - thank you very much.  Four years later and myself and family are all doing much better than we were before, own a home, cars for every family member, jobs for every family member, college for the kid so for all of you who think that nothing but a bunch of free loaders voted for the President, everyone in my family voted for him as well as everybody I work with except for one.

Nov 7, 2012 7:25PM
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Why all the assumptions that all BO supporters are freeloaders and sponges? I am a reduced price lunch kid who worked hard, got a degree, and now continues to work hard to earn my comfortable salary. I am satisfied paying the taxes I pay and am willing to pay even a little more if it guarantees that today's younger people get the same opportunities that I did. I voted for BO in 2008, voted for Johnson this time but only b/c Romney had my state sewn up.
The country is full of all kinds of individuals.

Nov 7, 2012 7:24PM
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I removed all but what I need to pay my bills from month to month from the bank....don't think I want it there for anyone to know of.   I am glad I sold my home (got rid of property taxes that were out of control and insurance that was expensive and paid for nothing). Will not buy again until Obama is out of office (sorry, but if you thought the last 4 years was BAD then you have no idea what BAD is).....it's about to get bad....just because Obama announced the "recession is over" does not mean a thing....reality is, the recession is just beginning it's big time downward slide to BIG DEPRESSION".   Thanks to Obamacare, no one is hiring...if they do hire, it's just enough hours to not have to offer you benefits....and the pay is sucking (I was offered a job for less than half the pay, no benefits and only 24 hrs a week......with 20 years experience as RN).   By the way, my insurance has doubled in the past year and another increase in January is coming....thanks Obama supporters....and I have no medical issues and am on no meds.   I guess I too will get a gun, stock up on food while I can afford it, hide my money, and go on food stamps....thanks Obama supporters...you won.   I wonder, with so many out of work, and so many about to be laid off (yes, I mean you)...who's going to pay the taxes?
Nov 7, 2012 7:23PM
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Addendum: the 22,500 is in a 403 (B), protected from taxes on dividends.
Nov 7, 2012 7:23PM
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Four more years of blaming someone else. Lets see.... Bush or will it be Congree this time. This guy cannot LEAD, cannot create partnerships across part lines, and he was re-elected??

Hang on folks.... its going to be a long four years. 

Nov 7, 2012 7:22PM
avatar

Well, when you have good companies plunging and a 20 year view, it will be time to buy.

 

Me, I have 22,500 that goes into one retirement account each year, with 50% being overseas---Mutual funds. The other thing I have is a 8,000-9000 SEP that I will be investing in stocks such as Phillip Morris, Coke, etc. I will be starting to put my next deposits into that next April, when the smoke will have cleared a bit. But Phillip Morris has NO EXPOSURE to US markets, and my dividends will be protected in a tax deferred fund. Maybe some British Tobacco, too, hmmm....

 

Anything else I can invest for the next few years will be going into Gold and Silver. No doubt under an Obama administration things will NOT get better, as they never do under socialists. Proof 70 coins of gold and silver should do well. As my wife puts it..."with this idiot in charge, it is a certainty that Gold and Silver will go up."

Nov 7, 2012 7:22PM
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A great day for America.........Nov 6th, 2012.....

Finally the Supreme Court will be filled with young modern progressive thinking...Justices....

The most important reason for the Re-election of PRESIDENT BARACK OBAMA......
Nov 7, 2012 7:20PM
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CRAZY WROTE;

==Congratulations Tea Party Patriots, It worked, we now have the Liberals right where we want them. In 2014 the Country will be begging for change and we will then gain control of the Senate and House.....then...

 

When 2016 arrives with the Country nearing a Civil War and in total economic ruin.... we will disregard the Republicans and establish a independant Tea Party Platform for President.

 

This has saved us at least 4 election cycles and will establish a US Constitutional Government that was created by our Forefathers......cheers.============================

 

YES HIS A DRUNK BUT HIS OUR DRUNK. 

 

 

 

Nov 7, 2012 7:20PM
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why would anyone be suprised by this. The country has just elected a proven loser. My gosh.
Nov 7, 2012 7:18PM
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WALL STREET is deliberately short-selling in order to make a huger profit on the last rally of the year. This kind of activity should be investigated and the initiator punished. Maybe also an angry reaction by Wall Street to four more years of honest oversight of their shady deals by the Obama administration. I believe in our President and I double-dog guarantee you this stock market will be up huge in late 2013 through 2015 because of Fed action and President Obama's policies. Can a budget deal be worked out by December 14th? Who cares. Either way, Republican's defense stocks are facing a mandatory $1 trillion cut in January. This is what needs to happen. We need to keep cutting the fat off the miliary-industrial complex until none is left.

Nov 7, 2012 7:16PM
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Romney was right when he said it would be an uphill fight because 47% of the population is depending on the rest in some fashion.  Now the Republicans have got to hone their message for the next election to persuade more women and hispanics to their side.

Unfortunately it will be a long four years until the Republicans have the chance to field another canidate for president.  In the meantime, it will be a rocky ride on the stock market.  The good news is that the Republicans control the House....................however, they need a very articulate spokesperson to combat Obama..................................

 

avatar
All's going according to plan.  Through the illegal votes of illegal alien criminals (and the dead) yesterday, and the shortsighted votes of those without a pot to pee in (What do they do when all the money to steal and redistribute is all gone?) the Globalist Puppet has been decided. Now, as planned, the Globalists have an open door to level American wealth down so that the non-"elites" (oh, Lord; nothing elite of this evil central trash) as all "equally poor" with the rest of the world and thus enslaved under Globalist One World rule.  In the last twenty-four hours the like of Henry Kissinger, David Rockefeller, Zbigniew Brzeziniski are rejoicing.  America will now fall under illegitimate UN rule as planned, just as soon as the lame-duck Globalist Puppet has eliminated anyone who might rebel.  Goodnight America and Goodbye, say hello to being just another prefecture under foreign Globalist rule.  America has now sun-setted and China is the Superpower, controlling every aspect of Amerika from foreign shores.  The few rich and their money remaining in America (most are long gone) will now lifeboat out.  We've seen the beginning of the Long March Down to Oblivion as a country and a financial power today.
Nov 7, 2012 7:16PM
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If people think it was bad durind the past 4 years, wait and see what he will do now that he  does not have to run for re-election. He got the majority of the latino vote; ironically, they helped elect a president with the same ideas and values that caused them or their family to leave their country of origin. Can someone name one latin country that compares to life in the USA? My father left Italy because he did not want his children to deal with a socialist society. We immigrated to Canada in 1960 and saw that country go down the tubes through the years. If anyone wants to know what Obamacare will be like in the coming years, just ask me. With the Canadian socialized health system I lost my sister at the age of 22; We could not get an appointment with a specialist for 6 months. My father went to doctors complaining of rectal bleeding and for 15 years they never did a colonoscopy. Finally 7 years ago with now other options they operated on him. After his operation I saw my father suffer like nothing I could even imagine. In the largest hospital in Montreal, my father was bleeding internally, screaming; the nurses came in and called for a doctor. The doctor answered " I am alone you will have to do the procedure yourself". The nurse tried but it got worse. Again she called for a doctor to come, 3 more times. She called the doctor crying for help "I am not a doctor, I am loosing this patient". Again the doctor said, I am alone and I have other things to do, you will have to take care of your F.... paient yourself." My dad went into a coma and never recovered.The doctor finally came the next day and told us to prepare for a funeral. My mom was sent home for 3 months with tylenol by several doctors. She had all the sympthoms of a stroke and they never did any tests. She finally died from a stroke at the age of 66. This is only the beginning! People don't realize that in a socialized health care system the well to do will always get good care at private clinics; it is the poor who will have to wait in line, just like my family, with harsh consequences. Right now gas in Canada is  almost $7.00/ gal. in certain areas. Tax on purchases is 15%. Income tax  is high and food prices and comodities are through the roof. This is what Obamacare will bring in just a few years down the road. People need to lear that nothing is free and that it is always worse and more expensive if the government has his hands in it. I am an American citizen now and my heart really cries out for this country. I know the path we are headed in, I have already lived through it once, but I always hoped my children would not have to.
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