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 2:47PM
avatar
Sad day for America.... and for the world....another four years of incompetency and bad decisions...
Nov 7, 2012 2:46PM
avatar
Of course all the doomsayers are blasting Obama and hollering about the U.S. becoming another Greece and/or Spain.  The election yesterday to some is a prelude to the Mayan Calendar Doomsday script, right?  The present day Mayans are laughing at all the dopey gringo new age types who think the calendar predicted The End.  We have Alsatian (French-German) relatives in their 90s who are still here although to many, 1945 was Year Zero, when much of Germany was bombed and decimated by us, our allies and the ruthless Russians.  
avatar
Sold off my stocks 2 days ago. Come January 1st, it`s going to get real ugly, No matter how much money they print there won`t be any free rides anymore.
avatar
maybe it is the end of the America the way we once knew it.  It all seems like a bad dream. i was hoping it was a bad dream.... but I woke up today and it is real. And it is really bad
Nov 7, 2012 2:43PM
avatar
You phucking libtards don't have a clue of what you just did.  Electing a muslim terrorist for 4 more years, we are all phucked...
Nov 7, 2012 2:42PM
avatar

fiscal cliff = people condemn this country to suicide by Obama.  You can't reduce the deficit by $207 billion while adding $1.8 trillion to the national debt in the same time period and grow the economy.

Debt won't grown an economy no matter how many times Obama and Bernanke claim it will.

Nov 7, 2012 2:39PM
avatar
For a few pieces of silver (what he gets from taxing the rich more) he will veto anything else and we go over the cliff and cut defense spending and we are where Obama wants us to be.  Vulnerable.  Should the world change currency standards from the dollar we will crumble as Greece.
Nov 7, 2012 2:38PM
avatar
I was wondering what spin would get put on today's stock drop.  Couldn't have been the outcome of the election...
avatar
Welcome to dark, dismal 4 years. Democracy is over. Now I guess we'll learn what survival truly is!
Nov 7, 2012 2:37PM
avatar

Is not Congress immune from insider trading?  They set the tone for the country. 

There are some serious cuts coming and they already know where to put THEIR investments.

But they ain't tellin' you hillbillies a damn thing...hahahahahahahaha.

You have the fox guarding the hen house and all you do is bitch about the guy running the farm...

lmfao.

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
avatar
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
avatar
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
avatar
America has 2 options...  IMPEACH and or ASSASSINATION
Nov 7, 2012 2:32PM
avatar
  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
avatar

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
avatar
Just a matter of hours to see what the next 4 years of phuckhead is going to do to our Country...
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