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)










 

1653Comments
Nov 7, 2012 6:30PM
avatar

stock going on sell for black friday hey when the get cheap enough buy there alot of companies in the dow that are making money ex. cat and other companies too go on sale before christmas like apple then there earning come out next quarter and youll be wishing you bought now in november im an elliotician dow going to 12000 previous pullback then it will explode youll wish you bought right now its normal for pullback like every year last year it happened early ended in oct then went up well anyways youll see

Nov 7, 2012 6:29PM
avatar
This small downturn is just the start of what is coming. The rise from early 2009 has been nothing but a bear market rally. 

Before this is over, Obama will regret winning re-election. 

Barack Hussein Obama will become known as Barack 'Hoover' Obama......at best.
Nov 7, 2012 6:29PM
avatar

Bush took office - Dow 10,587

Bush left office - Dow 7,949

Obama took office - Dow 7,949

Today - Dow 12,932

 

I'm sorry, who is better for business? I guess money does make people stupid.

Nov 7, 2012 6:28PM
avatar

>>Canada is looking real good..<<<  

 

(slap on forehead)...  Obama's brand of socialism isn't good enough for you?  You want even more of it?

Nov 7, 2012 6:27PM
avatar

Word to Jay-Z and his wife:

 

Why don't you get two some class, bitches? Freaking racists.

Nov 7, 2012 6:27PM
avatar
So many people here know how to fix the country, and yet you're just sitting here on your lardasses and commenting on news articles. Maybe you're the problem since you have all the solutions and yet aren't doing anything about it.
Nov 7, 2012 6:27PM
avatar
The grinning multitudes of misinformed voters will soon realize that they will be required to pay the piper for the next four years and they will blame the last president. Well the last president is directly responsible for this and knew that these voters had no political savvy. There were tons of information poured down the Mass media pipeline to their clueless minds and largely ignored. Starting the next four years will be an eye opener and when they ask who reelected this bozo  just look in the mirror
Nov 7, 2012 6:26PM
avatar

>>>they also don't care that our country is going into the pooper with every passing day that this clueless moron is in office<<<

 

(clap....clap....clap)  What a wonderful and powerfully dramitic insight into the challenges our country faces.  You know, it's easier to point a finger than to lend a hand.  Get up off your own rear end and pitch in.

Nov 7, 2012 6:26PM
avatar
we got to get them evil rich. 24 months tops. being generous. the only good from this is the civil war was delayed. 
Nov 7, 2012 6:25PM
avatar
Don't worry. It's all George Bush's fault.
Nov 7, 2012 6:25PM
avatar

Wall Street pulled a fast one on its investors today!!! Nothng happened in the last 24 hours that Wall Street didnt know about before today. Its called manipulation!!!! 

Nov 7, 2012 6:25PM
avatar
so-if romney was elected instead we wouldnt be  16 trillion in debt and ready to go over the fiscal cliff?i have news for you-----this situation along with taxes about to go up are the same whichever party won the election
Nov 7, 2012 6:25PM
avatar

Hockey JP....You should have had a good, gay teacher, when you were or are a kid...

You may have learned better grammar and spelling when you attended their class.? 

Nov 7, 2012 6:25PM
avatar
Bottom line...Obama won...America Lost!!!  Now I have to tell my children that all of their hard work and effort will definitely pay off...for all you lazy @$$ dummycrats who woke up just before polls closed to go vote.  Now my daughter can look forward to huge student loans (because all of her cohorts will go to college free because they "can't afford it") and the prospect of not being able to find a job when she does graduate at or near the top of her class because there will be no jobs because our dummycrap president has turned us into a Socialist Republic where those who work have to hand over 50% of their income to pay the way for those who choose to be laz @$$es.  Thanks alot America!  Your children will be paying for your mistakes because by the time they need welfare there won't be any money for it!
Nov 7, 2012 6:24PM
avatar

Yeah, this blog is populated with a bunch of sore losers. There was no way Romey was going to be able to deliver most of his campaign promises anyway. We have a divided congress just like the nation. The 47% that Romney wrote off  spoke up with their vote and it wasn't for Romney!. To bad financial success for the rich comes at the expense of the poor or less fortunate - that's capitalism in action. Its what the Republicans want you to believe so you can distance yourself from it and ignore the downside for political gain!  

Nov 7, 2012 6:24PM
avatar
Just remember, he still has the House of Representatives to blame when things go from bad to horrible.  Canada is looking real good..
Nov 7, 2012 6:24PM
avatar

Well gas prices have been dropping. According to Obama thats a sign of a bad economy since according to him they were going up because the economy was getting better.

 

Less than two years until serious buyers remorse.

Virgina, Ohio and Pennsylvania , you just voted yourself out of any further new coal mining.

Those in your state not smart enough to understand will soon feel the effect as your states economy tanks. You will begin to resemble detroit. Oh yeah and Virginia can kiss building our ships goodbye too. Everyone else get ready for $5.00 + gas, because they want it that high and get ready to pay some serious money for electricity. But hey, be careful what you wish for.

Obama has definitely reinvented the mouse trap only for people. Its baited with free stuff and people have taken the bait. Just wait until the trap closes.

A very sad day in America. I wonder who will be the next death at his hands like Brian Terry or those he hung out to dry in Libya.

This is Obama's revenge on America, since he loves that word. Also get ready for the "punish the enemy" phase and retaliation for any red state.

Nov 7, 2012 6:23PM
avatar
Thank goodness for bear funds. LMAO. The majority voted for poverty and you sure will get it. But at least you have your tattoos, cigs, keystone beer and prescription drugs for ED. Life is good.
Nov 7, 2012 6:23PM
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.

Nov 7, 2012 6:23PM
avatar
I'm plucking big bird now. Going to roast his **** for Thanksgiving....
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