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Market Recap: Worst Day of 2012 for Stocks

Nov. 7, 2012 6:03pm

Markets got slaughtered today:

â–¼ Dow: -2.36 percent
â–¼ Nasdaq: -2.48 percent
â–¼ S&P: -2.37 percent

Precious metals:

â–² Gold: +0.11 percent to $1,714.75 an ounce
â–¼ Silver: -0.58 percent to settle at $31.73

Commodities:

â–¼ Oil: -4.15 percent

Markets were down because:

The Dow Jones industrial average fell 2.4 percent, giving it its fifth worst one-day drop following a U.S. presidential election. The biggest, in 2008, came in the midst of the financial crisis on the day after President Barack Obama won his first term.

Investors dumped stocks Wednesday in the sharpest sell-off of the year. Frantic selling recalled the days after Obama’s first victory, as the financial crisis raged and stocks spiraled downward.

Four years later, American voters returned a divided government to power and left investors fretting about a package of tax increases and government spending cuts that could stall the economic recovery unless Congress acts to stop it by Jan. 1.

In Europe, leaders warned that unemployment could remain high for years, and cut their forecasts for economic growth for this year and 2013. The head of the European Central Bank said not even powerhouse Germany is immune.

The Dow Jones industrial average plummeted as much as 369 points, or 2.8 percent, in the first two hours of trading. It recovered steadily in the afternoon, but slid into the close and ended down 313, its biggest point drop since this time last year.

Energy companies and bank stocks took some of the biggest losses. Both industries would have faced lighter, less costly regulation if Mitt Romney had won the election.

With the 2012 election over, traders turned to Europe’s increasingly sickly economy, dragged down by a debt crisis for more than three years. The 27-country European Union said unemployment there could remain high for years.

The European Commission, the executive arm of the EU, said that it expects the region’s economic output to shrink 0.3 percent this year. In the spring, the group predicted no change.

For next year, the commission predicted 0.4 percent growth, barely above recession territory. It predicted 1.3 percent last spring.

Renewed focus on European economic problems also pushed the price of oil down $4.27 per barrel, its biggest decline of the year, to finish at $84.44, the lowest since July 10.

The Dow closed down 312.95 points, or 2.4 percent, at 12,932.73 – its first close below 13,000 since Aug. 2.

The Standard & Poor’s 500 index fell 33.86 points, or 2.4 percent, to 1,394. That was the broader index’s first close below 1,400 since Aug. 30.

The Nasdaq composite index lost 74.64 points, or 2.5 percent, to 2.937.29.

As jitters about the election subsided, traders confronted an ugly reality: The so-called fiscal cliff, which will impose automatic tax increases and deep cuts to government spending at the end of the year unless the president and Congress reach a deal.Market Recap: Worst Day of 2012 for Stocks

That’s no easy task for a deadlocked government whose overall composition has barely changed – a Democratic president and Senate and a Republican House.

If Congress and the White House don’t reach a deal, the spending cuts and tax increases could total $800 billion next year. Some economists say that could push the economy back into recession.

Fitch Ratings offered a warning Wednesday about the perils facing the U.S. If Obama does not quickly forge agreement with Congress to avert the fiscal cliff, the credit rating agency said, it may strip the U.S. of its sterling AAA credit rating.

The government’s failure to come up with a plan to reduce the deficit led Standard & Poor’s to cut its rating of long-term U.S. Treasury securities last year from a sterling AAA to AA+. It was the first-ever downgrade of U.S. government debt.

The Associated Press contributed to this report.                   

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Comments (24)

  • justa_thought
    Posted on November 8, 2012 at 8:16am

    More of the same to come. In fact four more years of the same. Why would anyone invest with this administration? I have no idea. Ask for a king and you will get a king. We asked and we got. Now we will reap what we have sown.

    Report this comment

    justa_thought  
  • pookieamos
    Posted on November 8, 2012 at 12:49am

    Smith and Weston stocks were surging today , up $ 10 a share ! it was the only one I saw surging ! get your guns and ammo , ya never know when Obama will Issue an Executive Order to close gun shops down !

    Report this comment

    pookieamos  
  • bumfuzeled
    Posted on November 7, 2012 at 7:28pm

    So B.O. being elected caused the number one and number two worst stock days after a presidential election. Tell me again how he is supposed to fix the problems of the last 4 years. He thinks the problem he inherited in 2008 was bad, the one he inherited this time really su(ks.

    Report this comment

    bumfuzeled  
    • rickc34
      Posted on November 7, 2012 at 7:35pm

      This is only the begining. Obama has not even started to dismantle America. A days wages for a loaf of bread.

      Report this comment

      rickc34  
    • coldnorth
      Posted on November 7, 2012 at 10:27pm

      I was talking to a democrat friend earlier today.
      I said: “hey look the stock market is tanking, what do you think of that?”
      She said “Well, after 8 years of bush, it will take BHO alot longer to fix things.”
      I was speechless. At some point they have to stop blaming bush.
      I told her: “see you later, I’m off to the gun store, got to pick up some supplies”

      Report this comment

      coldnorth  
  • noland
    Posted on November 7, 2012 at 7:00pm

    Sweet Mollaasssssses!! Are we in Heaven yet? Cause the anti-christ ain”t leaven.

    Report this comment

    noland  
  • forthepeople
    Posted on November 7, 2012 at 6:59pm

    Ever closer to the Cliff ?

    Report this comment

    forthepeople  
  • Jenasus
    Posted on November 7, 2012 at 6:54pm

    Romney won the election and Obama stole it.
    All the Demoncrats do is lie, cheat and steal.
    The election is as fraudulent as Obama is.

    Report this comment

    Jenasus  
  • americansfightingforcommonsense
    Posted on November 7, 2012 at 6:48pm

    2016 Obama’s America here we come. There will be little we can do now to slow down the fall, because the IDIOTS of America have just sold us out to the highest bidder. Obama and George Soros will rule the world and we will all be just a note in some history book, if that.

    Report this comment

    americansfightingforcommonsense  
  • AbrahamsSheepdog
    Posted on November 7, 2012 at 6:34pm

    We have a big picture. Playground with like 4-5 thugs, a weak group, and about 10-15 phcyco’s, and abunch of 3world beggers. Its not money for much longer. The thugs have about 1/2 the cash, psycho’s have the rest. Recess has been extended.

    Report this comment

    AbrahamsSheepdog  
  • historyguy48
    Posted on November 7, 2012 at 6:33pm

    If the markets truly though this was the disaster it actually is they would have opened down 500 and gotten worse from there. They will profit handsomely until our currency fails and even then, since they are the ones primarily responsible for what will happen, they will land on their feet.
    It’s the rest of us that will/are out of luck.
    Read Nathan Hales book “Death of Civilization; the Apocalypse Begins”. It is a novel that begins with the coming currency collapse and goes on from there. The preface reads like todays headlines. Scary!

    Report this comment

    historyguy48  
    • Jenasus
      Posted on November 7, 2012 at 6:49pm

      It sounds like a good one. I am going to read it too. Maybe Hollyweird will make a movie of it.

      Report this comment

      Jenasus  
  • Smokey_Bojangles
    Posted on November 7, 2012 at 6:26pm

    4 more years!!!!!!
    Once I built a tower…to the sun
    Bricks…rivet…and lime
    Once I built a tower…now it’s done
    Brother, can you spare a dime?

    Report this comment

    Smokey_Bojangles  
    • AbrahamsSheepdog
      Posted on November 7, 2012 at 6:38pm

      Nimrod. 1st king. Noahs grandson. Tower was built to be above another flood. His simbol (1 of thousands) is a scythe and old man. He has many names

      Report this comment

      AbrahamsSheepdog  
  • Maximus_Delta
    Posted on November 7, 2012 at 6:21pm

    I hope the bottom falls out…

    Report this comment

    Maximus_Delta  
    • amagaux
      Posted on November 7, 2012 at 6:34pm

      Well, grease up and bend over fellas, you are about to feel the full Obama impact…..

      Report this comment

      amagaux  
  • Konservative PUNK
    Posted on November 7, 2012 at 6:17pm

    As long as the Fed is pumping, the market will rise. Interest rates cannot remain this low for much longer, and when they rise, the bottom will fall out of the market. Put your money in Gold, Guns, and Lead.

    Report this comment

    Konservative PUNK  
  • Konservative PUNK
    Posted on November 7, 2012 at 6:15pm

    ATLAS is SHRUGGING.

    Report this comment

    Konservative PUNK  
  • Revelation1911
    Posted on November 7, 2012 at 6:12pm

    I give it 6 months until total collapse

    Report this comment

    Revelation1911  
  • Jenasus
    Posted on November 7, 2012 at 6:10pm

    The stock market will crash and we will be in global depression.

    Report this comment

    Jenasus  
  • 2MINUTESTOMIDNIGHT
    Posted on November 7, 2012 at 6:10pm

    Welcome to Obama’s America.

    Report this comment

    2MINUTESTOMIDNIGHT  

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