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 5:28PM
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The stock market would have dropped no matter who was elected as president. Investors are now focused on January 2013 when huge spending cuts and the Bush tax cuts will expire by Congressional agreement in 2011. Congress kicked the can down the road instead of working together and now the important decisions need to be made. Investors are a little jittery considering the intransigence on the part of the Republicans a year ago.
Nov 7, 2012 5:28PM
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Hey Christian Taliban,,,,,,let the RAPTURE begin !!!!      Don't wait until Dec 21st, 2012......

The time is NOW !!!!
Nov 7, 2012 5:28PM
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Three words- GET OVER IT!

 

President Obama is the President-PERIOD!

Nov 7, 2012 5:28PM
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"47% don't pay taxes, (IRS says so), 47% are unconditionally Obama supporters. IT MAKES SENSE,
just keep borrowing money from China, and degrading our country."

 

So, somehow 47% of the population has found a way to avoid paying sales tax, FICA tax, Medicare Tax, Property Tax, State Income tax, City/County income tax, excise tax, state and federal taxes on gasoline, etc?  I don't think you got that statement right.

 

Besides, CONGRESS writes the tax laws, not the president.

Nov 7, 2012 5:27PM
avatar

 

couldn't you see it comming??? when almost half the public is on the dole and getting handouts, who did we think they would vote for, they sure as hell were'nt going to vote for someone that woud get off their lazy azz and get a job! to all those who voted for obozo, you deserve what ur gonna get! those of us with jobs can only support so many of you, and there's gonna be alot fewer jobs to be had! IDIOTS

Nov 7, 2012 5:27PM
avatar
Hey, we are already saluting to the United States of India...who knows, maybe the United States of China will be better.
Nov 7, 2012 5:27PM
avatar

I shutter to think, when I read all the biggoted remarks of all the losers on this site, those whom fail to think about all the biggoted remarks that former presidential cannidate Mitt Romney and all his cohorts made against the 49% of the people in this nation that he said he doesn't care about and could take care of themselves, those meaning the middle class, the lower class, the poor, the unemployed, the retired, the sick and the dissabled.

 

I shutter to think that a republican canidate for any office will say quote:  A woman"s defence system will prevent conception in case of rape. (THIS ONE COMMENT DISCUSSES ME) it only shows the ignorance with the lack of knowledge of human ananomy.

 

I think the republican party are compleatly ignorant on the needs of this country and of it"s  citizens, they have shown that they are only concerned for the rich and ways to put more in their pockets by deregulating and puting the nation back into the same cituation that got us here in the first place !

Most Republican in office are being paid by the Koch brothers and therefore are being manipulated by them.

 

I believe if Gov. Romney and the republican party really wanted to win this election, they could have;

!- Shown the american people a plan for economic recovery

2-Shown his prior tax reports

3- Shown that he had not shiped jobs overseas

4- Shown that he cared for the middle and lower class

5- Shown how he would bring back jobs from overseas

 

We have the best and the strongest country in the world, a country that other nations look at us as a leader, we can and will put our nation back to prosperity and strength as we once were, by working together as nation of all the people !

I applaud President Reelect Obama for what he has tried to do with our country, exspecially with the partisan House Of Representives and unwillingness Of Congress to side with him on most important issues faceing this nation.

 

 

 

 

Nov 7, 2012 5:27PM
avatar
What does this tell you about Obama's economic recovery plan? Oh, he does not have one.  The people that CREATE jobs have no confidence in him, and this shows it.  He never had a JOB in the private sector and knows nothing about capitalist economic systems.  He is a socialist and his plan is to turn our county into a socialist country. Higher taxes (like the UK) to pay for all his welfare give-a-way programs, driving jobs and companies (like the UK) out of the country. America, who asked for this and you got it!
Nov 7, 2012 5:27PM
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It's time to cash it all out and go gamble in MD. 
avatar

Well, if that Bourgeois Pig Market crashes, at least it might take a few basis points off of the relevant GINI Coefficients!!!

Nov 7, 2012 5:26PM
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Hey robot you speak like a Obummer program but the Bailouts were caused by Clinton.

He is the one that put the fair housing clause out there you and your schooling taught lunicy

Well explain how when the republicans were in office I was making 65k more than four years after

your ?ucking retarded hero took office.

why was a gallon of gas 1.80 instaead of 3.80 and my 401 made money not lost half

like right after your stupid retard took office

Nov 7, 2012 5:26PM
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Mark my words there will be a time when people who have worked hard all thier lives and scrimped and saved and sacrificed all thier life and when retirement come they will get no social security because they were responsibile thier social security will be given to the free loaders and takers because by that time the have nots will outnumber the haves by 20 to 1. This is what Obama has in store for you. Just like the health care this will be mandated by excutive order. And you people that voted for him gave him that power. The joke will soon be on you.
Nov 7, 2012 5:26PM
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Thanks America. Lets let the economy fail again for 4 more years...us middle class will have to suffer again with higher taxes and yes a screwed up post education system
Nov 7, 2012 5:24PM
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I don't care what you say "It's all Bush's fault"
The fact that that was repeated by a majority of voting Americans at the exit polls and by the President of the United States while on the campaign trail shows just how much a failure the education system of this country is, as well as it's president.
     This scenario ought to make Jimmy Carter look like a genius before it's over with.
You'll get what you deserve, only problem is most of you won't even see it coming.

Nov 7, 2012 5:24PM
avatar

As much as I disagree with our current selection in leadership my strength in the one we serve keeps me going. Even when we don't see eye to eye on matter of importance my church and state are intertwined PRAYER, FASTING and REPENT. Feels like Sodom and Gomorra when Abraham pleaded with God for just 50 righteous to save his nephews city from ruin. All it takes is a small handful to make change. Let them hear WE ARE NOT going to back down from the things that are important as a whole .WE the PEOPLE have a voice when it gets used.  Our Governors, Senators and Congressmen are working for WE THE PEOPLE. Get those calls, letters, and emails HEARD.

Nov 7, 2012 5:23PM
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Yes, take it all in........Breathe deeply now and it will be all over soon...That's it ....One more deep inhale......Now.... Bite this....and go back to sleep......and you wont feel a thing...! The ether will be clouding your memory....And you will not remember the SLAVERY AT ALL...GO back to your nomal lives.....NOTHING HAS HAPPENED.....you are happy being a slave..! You are free.....! You cannot see the invisible jail you live in....!
Nov 7, 2012 5:23PM
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More like sour grapes by the haves, we lost so lets throw a tantrum.
Nov 7, 2012 5:21PM
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It wouldn't matter who won. Poor sports and idiots pull their money out when who they voted for lost. it would of tanked more if Romney won. the first 10 posts you see here are all extremists selling their uneducated and simply idiotic responses. This is the best the economy has been, since the last democrat. everyones facts are based on here-say....how hard is it to realize the people have spoken. How hard is it to realize 8 years of bush put us here and EVERYONE remembers. They remember a corporate cabinet that hid behind the mask of rural and religious Americas vote so they could rape the surplussed previously created, and destroy america. the dow , DOES NOT represent the economy.

if you think firing employees and downsizing is the answer to todays sotck fall and obamas re-election you probably didn't build the business you own, or you were never a success in the first place. stop blaming others for your short comings.

evolution called and told us the republican manipulation train is over...you cant control others rights, bodies, religions and beliefs. maybe in our lowbrow passed, but we have matured as a country and a world from a tween to an adult and we want our rights back and we want to help our planet. 

its takes time to get things turned in the right direction especially after 8 years of disgrace and rape to america from the bush admin. it was an attack on america even more than 911 was. carl rove should be imprisoned along with cheney and the rest of all you fear mongers.

NO one should ever live in fear. remember that simple little rule.
Nov 7, 2012 5:21PM
avatar

Welcome to Obama's America--

 

We r doomed...

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[BRIEFING.COM] The stock market capped the trading week with losses across the major averages. The S&P 500 fell 0.5% to surrender its weekly gain, while the Dow Jones Industrial Average (-0.7%) and Russell 2000 (-0.9%) underperformed. The two indices posted respective losses of 0.8% and 0.6% for the week.

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