The stock market tanked in the wake of President Barack Obama’s reelection, with the Dow Jones Industrial average down more than 330 points shortly before noon on the day after the election.
That represented a 2.5 percent drop for Dow hours after Obama won his second term. The NASDAQ was also off about 77 points, a 2.5 percent decline, and the Standard and Poor’s 500 index was down about 36 points, meaning another 2.5 percent drop.
The dip in the American markets came after European markets fell overnight, according to news reports, and arrives as attention turns to the looming fiscal cliff facing Washington.
“It’s a rush to safe haven,” James Paulsen, the chief investment strategist at Wells Capital Management, told Bloomberg News. “We’re selling off further on rising fears about what a fiscal cliff negotiation is going to mean here. People bring all their worst fears in.”
Fear of the fiscal cliff was a common theme Wednesday as experts assessed the market’s downturn.
“[We] knew that regardless of the outcome of the election, our focus would immediately be shifted to the ‘fiscal cliff,’ which is going to be difficult in and of itself,”Art Hogan, the managing director of Lazard Capital Markets in New York, told Reuters.
Economists at Capital Economics emphasized the uncertainty of future fiscal policy, according to The Washington Post.
“The reelection of President Obama removes one uncertainty that has been weighing on the markets over the last few months,” wrote Paul Ashworth and Paul Dales of Capital Economics in a research memo, the Post reported. “But they are none the wiser about if, how and when Congress will deal with the colossal tightening in fiscal policy scheduled to occur early next year.”
Mitch Mustain | Elite.
