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 8, 2012 2:18AM
avatar

I challenge each of you who are making such outrageous and disrespectful statements about President Obama to print out the comments that you and others wrote below and then review the comments after one year. 

 

If you are honest enough to accurately compare the situation in one year with what you are saying now, you will learn something.

 

 

Nov 8, 2012 2:17AM
avatar
Actually, I have nearly $500,000.00 in play and am an Obama supporter.  I have bulit up my portfolio over the years, by carefully watching what the mood on Wall street is, and acting accordingly.  I'm just a working stiff, (a 61 yr. old woman), who works for an airline, and belongs to two unions. I have always voted Democratic  and worked on many campaigns over the years, starting with George McGovern's. I moved all of my 100% invested in stocks total portfolio, in Feb. of 2008, to $1 a share mutual funds and only lost $303.13 in 2008.  Re-invested in stocks about a year later and added over $300, 000.00 more under Obama's tenure.  Just protected myself from over-reaction on Wall Street, to the President's re-election by moving out of stocks again, for a short while.  Lost no money.  I pay attention to some expert's opinions, certainly not all.  I go with logic, and not trusting anyone else but my own instincts.  Now, get over it.  Move on and realize that there are many Democrats far, far, richer than me, that have money in the market and are just average citizens who pay attention to all the markers.   
Nov 8, 2012 1:36AM
avatar
good job obama, nothing more than we expected.  Maybe it will not take 4 years to destroy America, just 6 months.  Maybe you should go golfing again. 
Nov 8, 2012 1:28AM
avatar
Bush started the free phones you in the bubble losers !!!   Get the hell out out of the country like you say you are and do it right now !!! Nothing to wait for !!
Nov 8, 2012 1:24AM
avatar

i'll tell you what our country needs to do.   Every person in the US pay a flat tax.  17%  and do away with all tax right offs.(even for companys)  Put a tax in place that would make it cost more to pay over sea's company to do our work.(then what it would cost here)

 Give everyone . even the rich child care credit. Just so the the rich cant say they are getting a free ride. Cause now they will to.  Even give them food stamps.  like me.  15 dollars.. haha.  What a joke that is.  End all Tax breaks.  So if you make a million then you pay 170k in tax.,   Too bad. I don't feel bad for anyone making that kinda money.  If i have to pay 17%  then why can't you.  end all tax caps.  Thats what needs to happen.  Stop these companys that make billions of dollars a year.  Start fines that would make them want to pay the employees better.  Why should we give our lives for you. It's about time you pay or close. Just remeber. Someone else will do it if you don't. 

Now you will get to see how it feels to no be sure how your future will look. cause maybe someone will walk in and take you out. 

Welcome to Our world. 

May only the smart and not greedy win  

Nov 8, 2012 1:18AM
avatar
If Boenher and you loser tea party pieces of crap had not bailed on the 4 trillion dollar cuts proposed by AGAIN PRESIDENT OBAMA.WE would not be in this mess now !!!! 
Nov 8, 2012 1:17AM
avatar

Well of course the stocks plunged... Any smart investor would have seen that coming a mile away.

Take away the rich man's candidate, and you see just how much impact the wealthy have on our economy.  You also see how much impact taxing the Sh!t out of them might change the economy.

Message to the wealthy.  You can't buy your way into the White House.  That is why your candidate failed.  Had you let him run on actual republican values, and not a one-sided coorporate greed campaign, he most likely would have won. Unfortunately, people saw right through it, and "the people" put his a55 back in his place. Obama, unfortunately, isn't much better. I wish we had a true candidate to vote on.

Nov 8, 2012 1:13AM
avatar

stocks plummet due to fear, but Hey obamas supporters still will receive their checks

 

Nov 8, 2012 1:08AM
avatar

You know..  It is sad to see how you sorry A@@ rich people are.  You know what. I'm not happy he is in office, but I can say.  I hope all you Take that gun you have and show your true self and pull it on your self and end it for us.   I love how you say of we get taxed then pass in on to them.  You know if i started seeing that.  I just would not buy anything you make or own.. 

 

  I don't feel bad for any of you?  It's about time the Rich get poor.   And enjoy the stuff the poor do. for once in your sad life.  The only reason i hope for a 1932 again. Is there will be alot of us and a little of you and alot of you killing your self. Which opens doors for us.

 

How could you of all people hope the world ends.  The rich and greedy would end up in hell 1st from what i have read in the book..  Im not sure your going to win here or there>>>>>   hhahahaha..   I hope it keeps on fallin. 

 

I'll get my grill ready so i can cook out in front of flo-met and when they all get walked out and closed..  Im going to make sure they know i don't miss them,or need them.

Nov 8, 2012 1:03AM
avatar
Someone, Republicans are the ones increasing entitlements with medicare D, stop voting for them and you'll see change.
Nov 8, 2012 12:31AM
avatar
I'm sitting here tonight reflecting........What a great day yesterday was for America.....My kids and grand kids......  I have renewed Faith in the wisdom of the American people....well a little more than half of them.......They got it Right !!!!

In 2014 they will finish the JOB.....
Nov 8, 2012 12:29AM
avatar

Chris Van Hollen and Elizabeth Warren in 2012 & 2016!

 

God bless America!

Nov 8, 2012 12:28AM
avatar

Those people called corporations lost yesterday.

 

As it should be!

 

God bless America!

Nov 8, 2012 12:20AM
avatar

Anymore it seems, the worst thing you can have in America is a job. Wonder if the Obama idiots have thought about what is going to happen when the people who don't have jobs surpass the ones that do. Back to work free loaders!

 

And since when in America do we punish people for being successful? I'm far from rich, but hey, if you worked hard and played your cards right...good for you! Why should you have to give away your success to people who do nothing for it?

 

"We're gonna ask the rich folks to do a little more!" Why don't you ask the poor ones to do something?

 

I'm in the middle of the middle class. Don't tax the rich! Let them go spend their money! They buy the products and services that the rest of us make and sell. Then we all do better! Get it Obama?

Nov 8, 2012 12:14AM
avatar

The election is over!

 

Go home and enjoy life!

 

God bless America!

Nov 7, 2012 11:58PM
avatar

Nancy Pelosi Logic::::  I guess we'll just have to elect him again to find out what he's REALLY going to do .......

Nov 7, 2012 11:50PM
avatar
You  Democrats already demand more of our money to feed your entitlement programs that help to create more votes for your party. Now you demand we change our ideology and become more centrist. You're nothing but pontificating fools. I can't wait to see you scramble for cover when the money pool dries up and all the rats you have been feeding come after you because you made them promises you can't keep. That is how "Revolts" begin. Your ideology will change with that scenario, won't it !!! Obama has created a substantial displacement for your parties leadership and the Democratic Party no longer has any political acumen. Your party will soon find that entitlements, which can't be supported financially, are a death sentence for your party. Your screams for help will fall on deaf ears when the rats you bought with our money start feeding on you !!!  

 

Nov 7, 2012 11:46PM
avatar

Expect the worst for the economy. With all the talk of "vote the bast#$rds out", we end up with the exact same political system we had before.

 

Once the middle-class and 1-10%'ers have been tapped out for paying welfare to all the Obummer supporters, then what?

 

This election surely was the death nail for America.

Nov 7, 2012 11:43PM
avatar

Obama Care Facts...bet you didn't know !!!

Go to You tube . com and search "Know the Truth about the Government Healthcare Bill"........Replies welcome especially from Obama voters

Surprised Yet??????? How about a $10,000 a year limit on benefits , yeah that's right a year, Try getting Cancer or having surgery and you'll find out exactly what Obamacare means when you are responsible for the balance......go ahead and watch the video.....it's all in there.

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