Fresh after President Obama won a second term, U.S. stock futures fell flat. What was behind the big sell-off on Wednesday? Chrisine Romans explains the factors fueling skittish investors.
“They had the roughest day we’ve seen in more than a year,” Romans says. “Internal sectors were telling us that this was a reaction to the Obama victory.” Banks, insurers, coal and energy stocks, for-profit education and dividend-paying stocks were all down.
Romans explains that dividend payers were down because “the President has said he’d like to raise taxes on investment income.” “Many of those other industries...think we’re gonna have a more regulation and as the president and the democrats have promised, and that’s gonna cost more money,” Romans says, “so investors were at least making that bet yesterday.”
On the other hand, hospital stocks were up, “because the thinking on Wall Street is that Obamacare is finally, finally secure.” But the sell off over all was due to more than just the presidential election. Romans explains that the markets reacted to factors concerning Europe’s debt crisis, the fiscal cliff, and the debt ceiling.