Stocks slide on Wall Street, extending sell-off
NEW YORK — Stocks slid on Wall Street on Thursday, a day after the Dow Jones industrial average logged its biggest one-day drop of the year, as investors fretted about the potential for gridlock in Washington.
The Dow closed down 121.41 points to 12,811.32, bringing its two-day loss to 434 points. The Standard and Poor's 500 index fell 17.02 points to 1,377.51 and the Nasdaq composite slipped 41.71 to 2,895.58.
The Dow plunged 313 points Wednesday, its fifth worst one-day drop following a presidential election. The biggest, in 2008, occurred in the midst of the financial crisis on the day after President Obama won his first term.
After Obama's re-election to a second term on Tuesday, investors turned their focus back to Europe's problems and the so-called fiscal cliff, a package of tax increases and government spending cuts that will occur unless Congress acts by Jan. 1. Investors see it as a serious threat to the economic recovery.
“The thinking before the election was that it would remove some of the uncertainty, but it seems to have done the opposite,” said Tyler Vernon, chief investment officer at Biltmore Capital Advisors in Princeton, N.J.
Stocks are still up on the year, but well below the peak they reached in September. That was when the Federal Reserve announced a third round of its bond-buying program, which is intended to hold down borrowing costs and encourage lending.
The S&P 500 is 6 percent below its high close of the year, 1,465, which it reached on Sept. 14. That was its highest level in nearly five years. It's still up 10 percent for the year.
Investors may be tempted to sell appreciated stock before a possible increase in the capital gains tax at the end of the year, Vernon said.
Tax cuts enacted by President George W. Bush expire at the end of this year and the government wants to cut a $1 trillion budget deficit.
“The mood of the market has certainly switched,” said J.J. Kinahan, chief derivatives strategist at TD Ameritrade, as investors monitor developments on the fiscal cliff and wait for more clues about Obama's agenda.
Investors were encouraged by reports on unemployment and the trade deficit that came out before the market opened. The Dow climbed as much as 48 points in the morning but started to sink after the first hour of trading.
The Dow fell steadily throughout the rest of the day, and more steeply in the last hour of trading. The Dow gave up 73 points in the last 40 minutes, accounting for more than half the day's loss.
Among stocks making big moves:
— Energy drink maker Monster Beverage sank 57 cents to $44.40 after the company said its revenue growth slowed in the third quarter.
— Dean Foods rose 32 cents to $16.40 after the company reported a third quarter profit of $36 million for the third quarter, compared with a $1.5 billion loss in the same period a year earlier.
— Burger chain Wendy's rose 13 cents to $4.39 after the company said that a key sales figure rose. Revenue at restaurants open at least 15 months rose 2.7 percent, the sixth straight quarter of growth.
— CBS rose 36 cents to $34.36 after the company said that earnings rose 16 percent as falling ad revenue was offset by higher fees from pay TV distributors.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Report: Heinz Field in running to host Bills-Jets game
- 3 from Western Pa. sentenced to probation for welfare fraud
- Last PA Turnpike defendants plead guilty but avoid prison
- Pittsburgh to offer free parking during holiday season
- Rossi: For Penguins’ Dupuis, family must come first
- Prosecutor’s former paramour to stand trial on assault charges
- CMU scientist receives top tech honor from White House
- Cut by Steelers, LeGarrette Blount joins Patriots
- Casey to Obama: Climate plan unfair to Pennsylvania
- Pirates ready to protect top pitching prospects from Rule 5 draft
- Rossi: As Blount walked, Porter called