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

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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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Nov 7, 2012 9:08PM
netflix or amazon users watch "dreams of my real father"
Nov 7, 2012 9:07PM

To all of those whose hopes were dashed last night - sorry.  But the majority of Americans disagree with you and all of your sad attempts to make yourselves feel better.  Here's a tissue.


Meanwhile, it's clear none of you were able to make out the article throught your thin veil of crocodile tears.  Read it and learn.  The same thing happened in 2008 but the POTUS still managed to pulled us out of a frigging recession - this despite an obstructionist congress since 2010.  Meanwhile, yeah - big banks, insurance companies, and dirty coal are all pissed off because Barack has worked extensively to take power away from these money hungry corporations and give it back to the people.  Boo-hoo.


And uh, yeah - crude oil prices and the european stock market really have nothing to do with the freshly crowned prez.  So go pound sand.


To be clear, the worst thing that came out of the election last night is that the 1%-loving GOP was able to retain its stranglehold on the House.  They will now continue propping up the filthy rich by way of tax cuts which could essentially build ground below the so-called fiscal 'cliff'.  Meanwhile, they will continue demonizing PBS, family planning agencies, and medicare as the root of all economic evil - as if that hurt us back before Dubya dismanted a gigantic surplus starting in 2000.  Which means more of the same crap that we have been seeing the last two years as well.  If you really want to cry, you should be crying about that.

Nov 7, 2012 9:06PM
 Hey Mitt. That's what you get when you poke the 47% with a stick. NEXT time let sleeping dogs lie
 And Paul-  I suggest you just burn Ayn Rands books and never ever bring her up again.  She kind of sticks in the Middle Class's craw once you get to know her
Nov 7, 2012 9:05PM

Dr. Obama says:


Bend over Americans and grab your ****, This is gona hurt a little.


Sorry, Its for the good of the poor.

Nov 7, 2012 9:05PM
It is rather bizarre that this particular venue will not post my replies with this "pundit" in deceit.  Not one problem anywhere else.  I will say it again.  This "idiot" retained his office for one reason.... welfare checks and this media that must be supportive.  You wanted socialissm...ladies and hispanics and blacks.  You have won another 4 years of doing nothing and we will pay for it.  You believe are as impossibly dumb as you voted. I am not paying crap for this con in will pay for it.  Eat it and survive because that is where it will be.    
Nov 7, 2012 9:01PM

If I had shares in stock and with Obozo the clown being re elected I would sell all of it and invest in physical precious metals and  survival goods , ammo and firearms.


Obozo is a failure , in his actions on Benghazi  proves it.  You are better off buying items to barter with and items to guarantee your survival when Americas economy dives into the greatest Depression ever seen .


Obozo and all his socialist programs will not be able to dig America out of the deep depression, government stimulus  and bailouts are just to make the bankers richer.


What obama has spent in his first 4yrs in stimulus and bailouts,etc  every working American could have recieved a check for almost $80,000 instead the money went to fat cat bankers and some of them not even in the United states.



Nov 7, 2012 9:01PM
Most of your are probably the same ones that were on here saying how Romney would win in a landslide,  Obama would be sent packing, etc.,    For all of you,   I give you the one fingered salute.  You deserve it.   Put your comments where the sun does not shine.   I love to see your pain.   Bunch of jerks!!!!!!!!!!!!!!!
Nov 7, 2012 8:59PM
Nov 7, 2012 8:58PM
 The GOP's economic logic is every bit as flawed ad their political logic. Spin to sway the uninformed just doesn't hack it anymore dudes. Trickle down economics does NOT work and guess what? Norman Rockwell is long dead. Get over it
Nov 7, 2012 8:57PM

I think I will be buying stock in towel companies with all this crying and whining being done.


Of course if the Mitt won, we'd have to buy stock in flip-flops or international, right? 


Plus if the guy can't win his own state, what does that say about him?

Nov 7, 2012 8:57PM

Why didn't that lamb's blood you painted on your doors last night save all you right wing uber stupids? Now you're all going to hell just like Mike Huckabee said you would.


PS - Look me up after you get settled in (I'm the guy with the tail)

Nov 7, 2012 8:55PM
How soon we forget.   It dropped over 486 points the day after Obama's first election victory, but the market has risen over 20% during his Presidency.   The markets rose each day after Bush's election victories, but they went down 3.1% during his 8 agonizing years of his Presidency.   SO TELL ME AGAIN ABOUT HOW THE MARKETS HAVE DONE UNDER HIS PRESIDENCY?   OH, YOU MIGHT ALSO WANT TO GOOGLE HOW THE MARKETS DO UNDER DEMOCRATIC ADMINISTRATIONS AS OPPOSED TO REPUBLICAN ADMINISTRATIONS, BUT, THEN AGAIN,  YOU ALREADY KNOW, OR I WOULD NOT BE ASKING YOU TO DO IT.
   Republicans have always been a bunch of whiners, cry babies, etc, when they do not get their way.   I have never been exposed to so many lies, and disguised racist remarks from the Republicans about Obama.  It  backfired on them, as reasonable and intelligent people saw through it..  He is Black, and he is President..........GET USED TO IT.   I am loving it.   
Nov 7, 2012 8:51PM

Maybe the Republican Congresses know are ready to compromise so just maybe we will see things done the Republican openly say we will approve nothing coming from the President well know have four more years and the morale is low  they get the message

Nov 7, 2012 8:49PM

obama backers?  Yeah, we're here - just got off of work, didn't have time to comment on anything - apparently all the republitards stayed home to wimper and sob after losing again. 


Not worried about a dip like this - we've seen worse and it means I buy more for less...


Of course if Mutt won we'd be investing in flip-flops and international stock, I mean jeep, I mean detroit, I mean the working class, yeah I meant international.

Nov 7, 2012 8:49PM

Obama to base. Obama to base. Come in. May Day!! May Day!! We're inverted. We're going in. Brace for impact!

Can I get a flying lesson now?

Nov 7, 2012 8:49PM

Obama to base. Obama to base. Come in. May Day!! May Day!! We're inverted. We're going in. Brace for impact!

Can I get a flying lesson now?

Nov 7, 2012 8:48PM
 All the  White Collars and Red Necks were on the hull of their overturned yacht shrilly screaming at the gathered press that it was all Obama's fault, to no avail. Glub glub glub!  And the BEST part is you can't say we'll just see about that on Nov 6!  But go on like it never even happened if it makes ya feel better
Nov 7, 2012 8:48PM
As of today investers have lost half of any gain they had this year.
Nov 7, 2012 8:48PM

Obama to base. Obama to base. Come in. May Day!! May Day!! We're inverted. We're going in. Brace for impact!

Can I get a flying lesson now?

Nov 7, 2012 8:47PM

Obama to base. Obama to base. Come in. May Day!! May Day!! We're inverted. We're going in. Brace for impact! 

Can I get a flying lesson now?

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