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.
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%|
|Heating oil (-HO)||$2.9621||$3.0529||-3.27%||1.64%|
|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; 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 lossThis 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 (HSIC) Research 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.|
|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%|
|U.S. Dollar Index||80.867||80.843||1.10%||0.43%|
|(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%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$84.44||$88.710||-2.09%||-14.56%|
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.
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?)
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.
Anyone that thinks Obama is the reason our stock plummeted is ignorant and knows NOTHING about how stocks work...
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.
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.
Well the stupid people that always have their hands out for the "gubments" to take care of everything re-elected the bone head so....lets put the blame where it is due....the low life libtards who want to bankrupt our once great nation the way they are already morally bankrupt!
Look for people to get tired of this garbage and start telling our elected employees what we want done for once instead of the other way around!
Are you people slow or what stocks go down today over "worries" so they can go up more when the next QE goes through.It's just the rich getting richer would happen if Romney won too.
What a bunch of whining doomsayers....Gee I can't tell which candidate all of you were backing. The GOP'ers created this mess first under "W" and then with the most recent budget debacle. Their inablilty to COMPROMISE was the reason for the first downgrade of our nation's credit rating and the fiscal cliff is looming ahead, because of their inability to govern. O's approval rating tops 50% and he won this election COMMANDINGLY. Hmmm... and what is the Republican Congress's approval rating? Has it skyrocketed to 20%?? Too bad we didn't fire more of the GOP'ers in Congress in this election cycle. America has spoken! Only you guys think America is too stupid to know what was said!
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[BRIEFING.COM] The S&P 500 ended this week with a bang, roaring to a new all-time high on the back of stronger-than-expected economic data, influential leadership, and an ongoing appreciation for the Fed's monetary policy support.
The bullish bias was evident in premarket action as the S&P futures pointed to a higher start without the benefit of any definitive news catalyst. Stocks indeed benefited from a blast of buying interest at the opening bell on this ... More
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LATEST MARKET DISPATCHES
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- Dow falls 59 as late-day gloom kills a rally
- Stocks held back by fiscal-cliff worries
- Stocks suffer worst weekly loss in 5 months
- Dow off 121 as post-election swoon continues
- Dow slumps 313 after Obama's re-election
- Dow jumps 133 as Americans head to the polls
All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.