After the Close - It was a difficult day to be long equities, both on these shores and overseas. Investors expressed their concerns about the looming “fiscal cliff” issue in the United States and the escalating sovereign-debt worries in Europe by selling equities from the get-go of trading. By the closing bell, the damage was reflected in respective declines of 313, 75, and 34 points for the Dow Jones Industrial Average, the NASDAQ, and the S&P 500 Index, with the index of 30 bellwether companies falling below the psychologically significant 13,000 mark in the process. Overall, declining issues outpaced advancers by more than a four-to-one margin on the New York Stock Exchange and by a more than five-to-one ratio on the tech-heavy NASDAQ.

None of the major sectors was immune to the today’s notable selloff. Even the typical defensive groups (i.e., utilities, healthcare, and telecoms) booked sizable losses in the latest session. Still, the biggest setbacks were for those industries most closely tied to the health of the global economy. Technology issues were also hit hard today, with shares of Apple (AAPL) now in bear market territory following a more than 4% decline in the session.

As noted, providing a one-two punch for investors today were the fallout from yesterday’s U.S. elections and the sovereign-debt problems on the Continent. Over here, market participants expressed concerns that the status quo in the nation’s Capitol following the elections could mean no resolution of the looming “fiscal cliff” of automatic tax hikes and spending cuts. The consensus remains that a compromise will be reached prior to the December 31st deadline or just thereafter. Investors were also jolted by cautious comments earlier today from European Central Bank President Mario Draghi about Germany’s economy and the European Commission’s lowered economic growth forecast for the euro zone in 2013 (cut from 1% in May, to 0.1% today). Not surprisingly, skittish investors gobbled up safe-haven fixed-income securities, in response. The yield on the benchmark 10-year Treasury note, which moves in the opposite direction to the price, fell sharply to end the session at 1.63%.

The strength of the dollar today—greenbacks were in demand as concerns about the euro zone grow—and the worries about the overall health of the global economy were not a good combination for the commodities markets. The most closely watched commodity, oil, fell more than $4 a barrel on the New York Mercantile Exchange today. It was also not a good day for those holding contracts for sugar, cocoa, lumber, and soybeans. Meanwhile, the price of gold, which was up sharply the last few days and is seen as a safe haven for investors during volatile markets, was relatively unchanged in the latest session. 

Meantime, we did get a good deal of earnings reports over the last 24 hours. Of note, legendary department store Macy’s (M) reported   better-than-expected third-quarter earnings, but the stock was lower after the company issued weak guidance for its important holiday season in the wake of Hurricane Sandy. WellPoint (WLP) trumped consensus earnings expectations in the latest quarter, but shares of the company, along with those of many of the health insurer’s peers, were down after President Barack Obama's re-election helped secure the future of his health care overhaul. Conversely, shares of Time Warner (TWX) and News Corp. (NWS) were higher after the media companies reported upbeat results after yesterday’s market close.

Looking forward, investors should be aware that volatility could continue to play a big role in trading, especially with the ongoing issues in Europe and looming fiscal concerns for the United States. The S&P 500 Volatility Index (or VIX), a measure of market risk, hit its highest market since early August today before finishing the session just under 19.   - William Ferguson

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.


12:30 PM EST - The U.S. stock opened sharply lower this morning, and has been falling ever since. Indeed, as we pass the noon hour in New York, the Dow Jones Industrial Average is off 300 points (-2.3%); the broader S&P 500 Index is down 31 points (-2.2%); and the tech-heavy NASDAQ is surrendering 68 points (-2.3%). Market breadth is decidedly negative, with declining stocks swamping advancers on the NYSE. Selling is apparent in all of the major market sectors with sharp declines in the energy, financial, and basic materials names. There are no pockets of strength worth mentioning today, as even the defensive sectors, such as the utilities and the healthcare stocks, are also moving sharply lower. Technically, the S&P 500 Index has declined, coming near its 200-day moving average located at 1,380. Hopefully, the market can find some support at this important technical level. 

The commodity markets are sharply lower, as well, further confirming investors concerns about the overall economic outlook. Crude oil is down about 4% today, at about $85 per barrel. Even gold, a traditionally defensive asset class is lower. Meanwhile, flight-to-safety behavior is surfacing, as investors scoop up Treasuries, sending yields sharply lower. The VIX is up 10%, to over 19, which suggests fears are mounting again. 

Investors may be reacting to the election results. The outcome demonstrated a sharp divide between Democrats and Republicans and that may have some worried that progress will be hard to achieve. Further, the nation still is grappling with a fragile recovery, an elevated unemployment rate, a looming “fiscal cliff”, and numerous problems overseas. In fact, the U.S. market got little help from trading overseas. In Europe, the markets started off the session with modest gains, but then fell sharply. Some weak economic reports in the region, as well as negative comments from the ECB president did not help matters. The euro is trading lower today at $1.28.

Elsewhere, the economic releases were minimal today. Tomorrow, the employment situation is back in the spotlight with the weekly jobless claims data, and the trade balance report for September. However, some corporate earnings reports are still being released. Today, we heard from Macy’s (M). That stock is mixed on a decent release. Agrium (AGU) shares are lower after the company put out a disappointing report. Also, News Corp (NWS) stock is up after the media company issued encouraging figures.   - Adam Rosner

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.


10:35 AM EST - Up one day, down the next is what appears to be taking place down on Wall Street over the past 24 hours. Thus, one day after the stock market celebrated the end of months of campaigning by pushing the stock market notably higher on Election Day, the bears are getting their revenge this morning--and in an increasingly big way.

Specifically, as we pass the one-hour mark of the new trading day, the Dow Jones Industrial Average, a 136-point winner yesterday, is off by 245 points. The Standard and Poor's 500 Index is lower to the tune of 27 points, while the NASDAQ is in the loss column by 56 points. Actually, the market is now off materially more than it was up yesterday.

Behind this selloff seem to be comments by European Central Bank President Mario Draghi. Mr. Draghi has intoned that the problems across Europe are now affecting Germany, the euro zone's largest and strongest economy. Europe's biggest economy, it would now appear, is no longer shielded from the effects of the euro-zone debt crisis.

There may also be some buy the rumor and sell the news effect on Wall Street, as investors seemed to conclude yesterday, even before the votes were counted, that we would continue to have divided government, which despite its obvious problems, may be what many want to persist. Whatever the case, the bears are clearly in charge this morning.  - Harvey S. Katz 

At the time of this article's writing, the author did not have positions in any of the companies mentioned.   


Stocks to Watch from The Survey Although the drumbeat of earnings news has started to slow, there are still many reports that will influence trading today. Stock futures are pointing to a lower opening, led by the likes of Plexus Corp. (PLXS). Shares of the company, which offers contract design, development, test, and manufacturing services for the electronics industry, are plunging in the premarket, on news that Plexus has lost its biggest customer, telecommunications equipment outfit Juniper Networks (JNPR). Elsewhere, shares of health insurer Well Point (WLP) are down ahead of the opening bell, as investors did not appear impressed with its quarterly results.

The news is not all bad, however. Indeed, shares of department store operator Macy’s (M), media conglomerate News Corp. (NWS), oil and natural gas exploration and production company Devon Energy (DVN), entertainment heavyweight Time Warner (TWX), and Clean Harbors (CLH), a provider of environmental and hazardous waste management services, are all indicating modestly higher openings this morning on earnings news. – Matthew E. Spencer 

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.


Before The Bell - The election is over. After what seemed like an eternity, Americans have spoken, and little has changed--neither the identity of the President, nor the overall composition of either house of Congress. Billions were spent and we probably will have continued gridlock in Washington. Still, with the results in, and a definitive result in the books, there is hope that the dreaded fiscal cliff of mandated tax hikes and spending cuts, which are due to kick in at yearend, will be sidestepped.

While the results were, on balance, roughly the same, the country is in somewhat better shape than it was four years ago, and that improvement, however narrow and inconsistent, explains much of the stock market's sizable recovery since early 2009. In all, the Dow Jones Industrial Average and the Standard and Poor's 500 Index are up some two-thirds in the past four years, while the tech-heavy NASDAQ has almost doubled.

Nowhere was this enviable strength more in evidence than in the latest session, which saw the Dow climb by 133 points, after having been up by as much as 175 points earlier in the day. It seems as though investors voted yesterday, with the bulls clearly getting the nod.

Actually, yesterday's bullish fireworks were not all that surprising, as the Dow's 1% advance was just a tad better than the average gain for that 30-stock composite since 1896 on Election Day. In all, that index has been up 0.8%, on average, on Election Day over the past 116 years.

Now, though, with the election in the books, and no repeat of the uncertainty of 2000 to look ahead to, the focus will be back on the fundamentals, and the pending fiscal cliff, noted above. There also are a few earnings stragglers to deal with, and the oncoming rush of results from the nation's retailers, many of which have fiscal third quarters that ended in late October. There also is the economy, which is getting better, but not dramatically so. There is little in the way of much heavy news out this week, but we will be getting data on the trade gap and weekly jobless claims tomorrow. Then, there is the cleanup from the tragic hurricane that struck the East Coast last week. The cost of that horrific storm may well top $50 billion. And now a new storm is coming up the coast, albeit meteorologists insist that it will not be nearly as damaging as Hurricane Sandy. Let's hope not.

As for the markets this morning, they were up in Europe earlier today, but the futures, which may have celebrated the election conclusion yesterday, seem to be getting a dose of reality this morning, as the markets look poised to open the session notably to the downside, with the Standard and Poor's 500 Index futures off by 12 points and the NASDAQ futures in the red by almost 24 points. – Harvey S. Katz

At the time of this article's writing, the author did not have positions in any of the companies mentioned.