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 7:15PM
avatar

===Thanks to you, we are  stuck with your guy.  Just remember, from here on, everything he does will be a direct reflection of YOUR lack of discernment. (that is, your lack of intellect.)  No more blaming Bush. No, from now on, we blame YOU... Obama is YOUR fault. (Can't wait to see who YOU blame?)=============================================================================

 

 

HAVE A NICE DAY : )

Nov 7, 2012 7:14PM
avatar

Classic...Tried to post this earlier for YOU and many others...

 

An EXIT POLL done yesterday and last night:

 

60% of voters blamed Bush for the Economic collapse/chaos and Recession.

38% of them blame Obama for the problems...

NO THEY DIDN'T FORGET...

Although the next 4 years if the recovery doesn't get better; I will be one of the first to blame Obama and Congress (House/Senate) in equal measures, for the failures.

Nov 7, 2012 7:13PM
avatar

I guess now that we've elected a plan that is "forward" we can be certain that we will go over the fiscal cliff face first. If Romney had been elected we may have just sidestepped over, but in either case it is a certainty that we will go over. Libertarians like Ron Paul and Gary Johnson seemed to be the only ones that wanted to put on the brakes.

 

With $16,2 trillion in debt, it's a long way down

Nov 7, 2012 7:12PM
avatar
 Some people who get in on the ground floor are going to make a bundle growing and selling pot legally in WA and CO. A constant 200 plant population occupying a mere 30' x 30' of warehouse space will yield $1500 a day in revenue at half the street price. Plus 25% for taxes of course! And since the number of  licensed growers and sellers will be limited, competition will be limited. As far as the Feds go this test case could lead to a revision of Federal law to make it a states rights thing. If a State wants to grow, sell  and tax any type of crop, be it tobacco, potatoes or pot, so be it. Don't like tobacco , don't live in N Carolina!
Nov 7, 2012 7:11PM
avatar
Look at all the Republican tears lol. Delicious
Nov 7, 2012 7:11PM
avatar
The people who re-elected him don't give a rip about the stock market because they don't have any money!  I'm absolutely sick today over Obama being re-elected.  Blame it on the Socialist Media and Hollywood...they are very much to blame.  God help this country over the next 4 years. 
Nov 7, 2012 7:11PM
avatar

I love it!!!!!  Shall we ponder what would have happened if Mutt won?  Price of Flip-flops sky rockets and international stocks take a huge gain as Jeep and the city of Detroit are moved overseas...along with all those jobs. 

 

Americans made the right choice, you bigotted sore losers who are brainwashed can just wait 4 more years...and remember your comments for if the markets gain tomorrow...or a republitard gets in and sells off america.

 

Ha Ha sore losers, just go behind your closet and cry yourselves to sleep for the next 4 years. 

 

Just have to wait for Paul Ryan...on Wisconsin!

Nov 7, 2012 7:10PM
avatar
good this is what they wanted and its just  started!
Nov 7, 2012 7:09PM
avatar
Honestly, these CEOs are idiots. I am getting more business then ever before. I recieved virtually no business during Bush but since Obama came in and I am getting tons more business. It might be because I actually fight for money and dont expect business to just fall on my lap. These CEOs need to grow a backbone and stop expecting multimillion dollar salaries during a global economic downfall.
Nov 7, 2012 7:07PM
avatar

EmptyC....Jeff,JR,Crazy,ABS Mr C. were probably getting paid by Karl Rove until midnight..

Classic he may not have left you out as a whack...You just do it for FREE...

Well at least we think you do ??

 

W isa LIAR....Yeah a lot of them are pretty much angry Racist, not sure how old.

Nov 7, 2012 7:07PM
avatar

Here's 5 reasons YOU voted for Obama. I guarantee at least ONE of these applies.

 

1. You are a Socialist - You knowingly identify with Socialist arguments, like those postulated by Karl Marx.  How happy you are to have public figures like Obama to move the agenda forward.

 

2. You are Easily Deluded - You have never studied Socialist arguments, but the idea of giving government all the power it wants to take money from mean oppressive people and give it to innocent suffering folks sure sounds like a good idea.

 

3. You are a Cultural Protectionist - A champion for group awareness.  Political correctness has brainwashed you into believing every person is to be stereotyped according to whatever culture they belong - Black, White, Male, Female, Gay, Straight, etc... Consequently, you say 'screw the constitution' - the individual rights articulated therein are not enough, government must expand its definition of 'group rights.'

 

4. You are Socially Paranoid - You have been brainwashed into believing your daily struggles are little fault of your own, It's only because you have the misfortune of belonging to one of the many oppressed groups categorized by global socialists and liberals: Poor vs Rich, Black vs America, Gay vs America, "Poor me" vs 'Whatever Bad-Guy Obama will create for me' ....

 

5. You are just plain ignorant. -  You are one of the people our forefathers spoke of, "Remaining ignorant of what your government is doing to you empowers them to do it all the more." 

 

Anyone with a modicum of real-world intellect could never vote for the kind of ill-fated journey this empty-headed dreamer (Obama) is proposing. Sadly, America is not the first to house more fools than wise. I hesitate to compare; but Germans felt Hitler would save them too!  Socialism has many wrappings; and all look delicious to the weak minded - like candy to a child.  Karl Marx called them "useful idiots" In the course of human events, is it time for the American Experiment to fail? Can the freedom-loving vision of our founders survive 4 more years of Obama's economic, social and constitutional abuse? Not likely. Can we recover?  Never in my lifetime.  America's useful idiots have spoken! We are  stuck with your guy.  From here on, everything he does reflects YOUR lack of discernment.  No more blaming Bush. From now on, we blame YOU. Obama is YOUR fault. ( Wonder whom YOU will blame?)

Nov 7, 2012 7:04PM
avatar

I've had it with the liberal media, especially on this website.  I'm switching to yahoo as my home page so I don't give msn my page views anymore, from which they profit.  If you feel the same way do so as well and boycott msn. 

Socialism is not the answer and the greed, envy, and class warfare Obama is sewing, together with his reckless overspending, are tearing our country apart and sending us down a path to ruin.  Shame on you people who voted for him.  You are dooming our young people and children to pay for your excesses and overspending.

Nov 7, 2012 7:04PM
avatar
Wow.....when are people going to learn the power is in the Congress...you don't like what is happening....change your representatives or senators...

I wonder how many of you making your knuckle-dragging comments actually got off your butt and voted.
Nov 7, 2012 7:04PM
avatar
We are talking about a bunch of wall street (people who don't like Obama) speculating (fancy, high dollar word for "Guessing"). These "speculators" are biased...(maybe racially...frankly I could care less)...they knew that had an ace in the hole with Romney and they lost that shot...it bothers me that our economic health is attached to these academically rich yet morally poor individuals...
Anyone that thinks Obama is the reason our stock plummeted is ignorant and knows NOTHING about how stocks work...

Nov 7, 2012 7:01PM
avatar

I just don't understand. The market, that signifies how American business is and will be doing, went down today? Gee I wonder WTF happened? Hmmmmmmmmmmmmmmmmmmmmmmmmm?

 

I'll tell you 59 million people. You re-elected Obama that's what.

Nov 7, 2012 6:58PM
avatar

The sheep(le),  have spoken.

Now the rich will be a little more poor.

The rest of us will be a lot more poor.

That's what happens when half the people are clueless about the laws of economics.

Nov 7, 2012 6:56PM
avatar
No one can force wealthy, educated people to keep their money in a "guaranteed to lose in the long run" market......this is simply how they got wealthy in the first place......three ways to work 1) physically ...with your hands and back. 2) Using your mind after a decent education (this creates wealth much faster) or 3) working at getting someone else to take care of you while you don't contribute anything.  (Government Job or Welfare)  
Nov 7, 2012 6:54PM
avatar
What a bunch of racist bitter old men. I did not vote for him either, but do you really think the giant turd on the other side was going to do you right?! Grow up boys, this is all smoke and mirrors. Look at the quality of food, bankers run amuck, FED in charge, Bilderburgers pulling strings, and all you do is bitch about it on a post. Get off your **** and realzie we are going down because that is most liekly the plan. Poison in your water, food and medication, and now all will fall back asleep while the agenda explodes in December. Watch what happens. Take your flu shot and go home to watch FOX news tell you what to do next.
Nov 7, 2012 6:54PM
avatar
Ok, this bodes well for our choice! LOL
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