As a sign, Obama gets elected and the market takes an almost 500 point drop.
Stocks fall as investors ponder Obama presidency
By SARA LEPRO â?????? 7 hours ago
NEW YORK (AP) â?????? A case of post-election nerves sent stocks lower Wednesday as investors began
questioning what impact a Barack Obama presidency will have on business and the overall economy. The Dow Jones industrials fell more than 300 points and the major indexes all fell more than 3 percent.
Stocks fell initially as investors cashed in gains after a six-day run that lifted the Standard & Poor's 500 index more than 18 percent. The selling picked up momentum as the market began to ponder what an Obama administration might do.
Obama will inherit an enormous budget deficit when he is sworn in Jan. 20. Analysts said they the market is already growing anxious about who Obama selects as the next Treasury Secretary, as well as who he picks for other Cabinet positions.
"A lot of the policy going forward is going to have an effect on the various sectors of the market," said Joe Keetle, senior wealth manager for Dawson Wealth Management.
Obama's victory means that industries such as oil and gas producers, utilities and pharmaceuticals may face greater regulation and even taxes, while labor unions and automakers are expected to benefit.
In addition, banks, insurance companies, hedge funds and the rest of the financial sector will almost certainly face attempts at a regulatory overhaul by the Democratic Congress next year.
Analysts said the market was also growing uneasy in advance of the Labor Department's October employment report, to be issued on Friday. Economists on average expect a 200,000 drop in payrolls, according to Thomson/IFR. Employers have been slashing jobs after a freeze-up in the credit markets crippled many companies' ability to get financing.
The market showed no reaction to the release of the Institute for Supply Management's services sector index, which fell to 44.4 in October from 50.2 in September. That's a steeper drop than the market expected, but analysts said investors have largely factored in negative economic news for the time being.
In midday trading, the Dow Jones industrial average fell 312.06, or 3.24 percent, to 9,313.22.
The S&P 500 index fell 33.49, or 3.33 percent, to 972.26. Through the six sessions that ended Tuesday, the index, the one most closely watched by market professionals, rose 18.3 percent.
The Nasdaq composite index fell 63.54, or 3.57 percent, to 1,716.58, while the Russell 2000 index of smaller companies fell 18.56, or 3.40 percent, to 527.41.
Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where volume came to a light 518 million shares.
Wednesday's trading, which followed a 300-point jump in the Dow on Tuesday, showed that the market is living up to expectations of continued volatility as it tries to recover from the devastating losses of the last two months.
Still, analysts said they're seeing a calmer mood on the Street.
"The credit markets are starting to show some improvement and I think that has to continue for all the markets to do well," Keetle said. The paralysis in the credit markets that began after the bankruptcy of Lehman Brothers Holdings Inc. in mid-September has been alleviated somewhat by a series of government interventions, but they still show some signs of strain.
"Unless there is some other dramatic event that takes place, I think the markets will perform in a little bit more natural way instead of large swings one direction or the other," Keetle said.
Banks continued to ratchet down the rates they charge one another for borrowing on Wednesday, but the key interbank lending rate â?????? the London Interbank Offered Rate, or Libor â?????? remains well above the Federal Reserve's target interest rate of 1.00 percent. Libor for three-month dollar loans fell to 2.51 percent from 2.71 percent Tuesday.
And the bid for Treasury bills remains high. The three-month bill, considered one of the safest assets around, fell slightly to 0.44 percent from 0.48 percent late Tuesday. A low yield indicates high demand.
The yield on the benchmark 10-year Treasury note fell to 3.72 percent from 3.73 percent late Tuesday.
The dollar fell against most other major currencies. Gold prices rose.
Light, sweet crude dropped $4.96 to $65.60 a barrel on the New York Mercantile Exchange.
In Asian trading, Japan's Nikkei index rose 4.46 percent, and Hong Kong's Hang Seng Index rose 3.17 percent. In afternoon trading in Europe, Britain's FTSE 100 fell 1.32 percent, Germany's DAX index fell 1.51 percent, and France's CAC-40 fell 1.21 percent.
i get taxed a lot as well.. i dont know what your problem is.
