US stocks suffer large decline
US stocks have suffered their worst one-day loss of the year as investors look past the presidential election and focus on big problems ahead in Washington and in Europe.
The Dow Jones industrial average plunged 313 points to end at 12,933, its worst day of 2012.
The Standard & Poor’s 500 index fell 34 points to 1,395 and the Nasdaq composite index gave up 75 points to 2,937.
American voters returned a divided government to power and left investors worrying about tax increases and spending cuts that could stall the economy unless Congress acts. In Europe, leaders warned that unemployment could remain high for years.
The losses were broad. Falling stocks overwhelmed rising ones by five-to-one on the New York Stock Exchange. Volume was heavier than usual at 4.3 billion shares.
“It does look ugly,” said Robert Pavlik, chief market strategist at Banyan Partners LLC. He said it was hard to untangle the impact of Europe-related selling from nerves about the US’s fiscal uncertainty.
“It’s a combination of all that, quite honestly,” Mr Pavlik said.
It was the worst day for stocks this year, but not the worst after an election. That distinction belongs to 2008, when Barack Obama was elected at the depths of the financial crisis. The Dow fell 486 points the next day.
This time, 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.
Stocks seen as benefiting from Obama’s decisive re-election rose. They included hospitals, suddenly free of the threat that Mr Romney would roll back Obama’s health care law.
Mr Obama was elected on November 4 2008. The Dow plunged more than 400 points on each of the next two trading days.
The blue-chip average hit bottom at 6,547 in March 2009, less than two months after Mr Obama took office.
Then it doubled over the next three-plus years as the crisis eased and a fragile economic recovery took root.
Things were looking so good that until recently some analysts were betting on when the market might hit an all-time high.
