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 2:36PM
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You no it all investors shouls of bought Kleenex stock the way your crying on here
Nov 7, 2012 2:36PM
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Now starts the OBAMA era of fiscal decline......Thanks Mr Prez.
Nov 7, 2012 2:36PM
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It is hard to believe, but Americans have been suffering the weakest recovery ever.  Annual GDP growth is actually slower than the recovery in the Great Depression from 1934 to 1940. Obama's win shows we should expect just more of the same.  Obama's desire to increase taxes and regulations will drive investment out of the US to other countries.
Nov 7, 2012 2:34PM
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Thank's to all the moron's who voted Obama back into office. Now we will see another Great Depression under his reckless spending and borrowing from Chine. Soon you will all be saluting to the United States of China. because of your "We Need Change" slug of a president!  He screwed up the past 4 years, so you let him decimate the next 4?  I'm moving to Canada.
Nov 7, 2012 2:34PM
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I DVR'D FOX news last night... so I can watch it again and again and again....
Nov 7, 2012 2:33PM
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America has 2 options...  IMPEACH and or ASSASSINATION
Nov 7, 2012 2:32PM
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  There's still hope Fox News! Get an impeachment move going for Benghazi. Start with a PERMANENT inset showing the Benghazi fire on your screen. Then bring up how Obama has abandoned our MIA's in Korea and Vietnam too! Surely you can come up with something.  Your Bossman Murdoch says grasp at straws if necessary otherwise ratings are gonna fall. He ain't paying you to sit around and mope
Nov 7, 2012 2:32PM
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The next 4 years is going to make the last 4 years look like a picnic.

Nov 7, 2012 2:31PM
avatar

It blows my mind that there are enough idiots in this country to re-elect a Muslim monkey. He has divided this country beyond repair. I'm telling you he wants to break this country and downsize it. He wants to be the Osama Bin Laden of the US. He wants to rule us. He is a dictator, that's why he wanted to kill Osama so bad because he was higher than Obama. He's not even an American citizen, if he was he would take Trumps money. Mark my words, after the next four years you will be begging for another President. It don't  really surprise me that he won when you add 20 million on unemployment, 40 million on food stamps, 80 million minorities and hispanics, and 10 million gays and lesbians, it's hard to beat those numbers. That's okay guys and gals you just stay home having babies, watching tv, drinking beer and eating steaks, we will pay your bills for you. For all the working people that is working 2-3 jobs to support our families and THEIRS we need to get our houses in order and be prepared for the worst because we have the worst possible leader that this world has ever known. Get your guns cleaned up and get plenty of ammunition, we are going to battle.

Nov 7, 2012 2:30PM
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Just a matter of hours to see what the next 4 years of phuckhead is going to do to our Country...
Nov 7, 2012 2:30PM
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Well I voted for Capitalism over Socialism.  All you freeloaders did was vote yourself a tax increase with Obamacare.  Not to mention his lack of intelligence.  To the freeloaders/liberals, I sure am going to enjoy making a profit off the things you sell at low ball prices to me because I will always have money despite you re-electing the worst President in history.  The only company that is happy is Wal-Mart because you will always be too poor to buy American and you certainly will never hold a job again.  Enjoy the moment.  You better hope the Mayans were right.  12/21/12 cannot come soon enough.  Bring on the fiscal cliff and let those unemployed stay unemployed.  You might want to brush up on your Mandarin Chinese.
Nov 7, 2012 2:28PM
avatar

Tumble!

Great to see you here today on this historic occasion!

Nov 7, 2012 2:27PM
avatar

I would bet what's left of my 401k that the bulk of Obama voters have no money in the market!!!

Why should they... Obama will give them everything they need for the rest of there lives!!!

Vouchers for Housing...vouchers for food...vouchers for cell phone...vouchers for another dependent!!!

By the time he's done I will be in that line too!!! 

Nov 7, 2012 2:25PM
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 And here you thought Falwell and the Religious Right were good at busing people to the polls for early voting after church.  The Religious Left made ya look like chumps!
Nov 7, 2012 2:25PM
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The market is down because people like Romney are selling off their stocks to pay less on capital gains before the end of the year when THEY LOSE THEIR TAX ADVANTAGE.

 

The only fiscal cliff is that the elites are pissed because their taxes are going up.  I say it is time to control the hedge funds that are betting against America at every turn.  Time to close the loopholes that allow billionares to pay less tax than the middle class. 

 

...and to those of you who said they would leave the country if Obama was elected again...well, BYE BYE....DON'T LET THE DOOR HIT YOU IN THE BUTT ! 

Nov 7, 2012 2:23PM
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We can't just reduce how big the deficit is getting, we need to reverse the direction of the deficit and reduce how big it's getting. That can't happen without more taxes coupled with (more importantly) monumental reductions in spending.  I hope Obama does this, otherwise America just re-elected George W Bush for 4 straight presidencies. 

 

*Edit: Just Google search "Bush 2.0: 100 Ways Barack Obama Is Just Like George W. Bush".

Nov 7, 2012 2:22PM
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A loser won.  There is no other way to say it.  America has elected a 100 percent loser as President for the next four years.  It is indeed unfortunate that failure is embraced by a slim majority of the American people.  We have a third world President for an America that is currently destined to become a failed dream.  In the next four years we can expect unemployment to soar, a drastic increase in the numbers of Americans on welfare, and an ever escalating national debt.  The only bright light is that as unemployment grows more and more of the illegal Mexicans will head back to Mexico unless they can survive here on the welfare their kids will collect.  Let's hope the House continues to stop every single thing Obama attempts to do.  He has already seriously damaged America.  Another four years of his failed policies will put it in a no recovery condition.  Obamacare will force Companies to eliminate the majority of their full time jobs.  This exempts the employees from Obamacare.  An increase in the number of uninsured will become the norm forcing more and more Americans onto Medicaid.  When ignorant people vote the results are usually disastrous.
Nov 7, 2012 2:21PM
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 Hear that sucking sound?  It's the money from Bush's Cayman Island speech attendees sending their money off shore. First thing Mitt . Rush and Rove did this morning ,no doubt
Nov 7, 2012 2:20PM
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You write as if the reelection of Obama has nothing to do with th drop in the stock market? We should sell, sell, sell for the Obamantion is upon US!
Nov 7, 2012 2:19PM
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The layoffs will start and all of the Obama backers will be crying wolf for him to force corporate America to hire them back as it is not fair that they lost there jobs. With the new taxes and Obama care he will want to push on corporations you will see more jobs leaving and heading to Mexico and China.
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