After yesterday’s elections restored the Washington, DC, status quo, with the Democrats holding the White House and the Senate and the Republicans retaining the House, US stock markets plunged in the first post-election trading day, with investors concerned that the leadership status quo would not resolve the fiscal cliff.
"In terms of the FC [fiscal cliff], perhaps the biggest concern right now is the fear of a more deeply divided Congress, with the Republicans in the House feeling emboldened as well as the Democrats in the Senate. Given the track record of our law-makers in raising the debt ceiling last year, there will be tremendous difficulty in getting a compromise on the FC, particularly in light of the fact that we are at the beginning the lame-duck session," Steve Ayer, managing director and partner at HighTower Strata Wealth Management, told The Street
The Nasdaq Composite
(INDEXNASDAQ:.IXIC) was down 2.39% to 2,939.85 points on robust trading volume of 916.47 million as of 11:57 a.m. EST.
Bringing some cheer to the index was Amyris
(NASDAQ:AMRS), which surged 26.25% to $3.27 after the renewable products company posted a smaller-than-expected third quarter loss. For the quarter, the company reported a loss of $0.34 per share on revenue of $19 million, when analysts had called for a $0.72 per share loss and $10.7 million in revenue.
(NASDAQ:CIEN) also received an 8.38% boost to $14.29 after AT&T
(NYSE:T) said it would invest $14 billion on expanding its wireless and wired broadband network in the next three years. JDS Uniphase
(NASDAQ:JDSU) also advanced 4.99% to $11.16 on AT&T’s announcement.
Coal stocks were hit hard after the elections, with James River Coal
(NASDAQ:JRCC) plunging 23.41% to $3.60. Investors feared that the Obama administration would put a halt on issuing coal mining permits. Because the company just bought back $61.4 million of its debt for $23.9 million through mid-October, there were worries that it would face a liquidity crunch, too.
(NASDAQ:PLXS) also slid 27.86% to $20.17, after it announced that it had lost a contract to manufacture switches and network gear for its biggest customer, Juniper Networks
(NYSE:JNPR). "Last quarter Plexus talked about how they had to give some pricing concessions to a number of their networking customers, and I suspect it was a pricing issue that pulled away Juniper," RBC Capital Markets analyst Amit Daryanani told Reuters
Tech stocks also took a beating, with Research in Motion
(NASDAQ:RIMM) (-7.23% to $8.40), Groupon
(NASDAQ:GRPN) (-5.51% to $3.77), Facebook
(NASDAQ:FB) (-2.56% to $20.63), Apple
(NASDAQ:AAPL) (-2.89% to $563.45), and Dell
(NASDAQ:DELL) (-3.88% to $9.16) all down on the day. Apple was down after Foxconn
(HKG:2038) admitted it was having difficulties meeting demand for the iPhone 5 because of Apple’s stringent quality standards.
No positions in stocks mentioned.
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