Markets give thumbs down to Obama victory

Stocks were down yesterday, a day after the re-election of President Obama, with the Dow Jones industrial average closing down about 313 points, or 2.4 per cent.

Investors seemed to be hardly enthused by Obama's victory over the more business-friendly Mitt Romney, which brought with it the prospects of continued deadlock in Congress that could make a fiscal policy crisis likely by the year-end.

The benchmark Dow remains below the psychologically significant 13,000, reached on 3 August while the Standard & Poor's 500 index and Nasdaq composite index were down 2.3 per cent and 2.5 per cent, respectively, with stocks lower across every industry.

The Dow, fell to its lowest at 12,933 since 2 August; with the S&P 500 and Nasdaq closing lowest since 6 August.

Investors are concerned about how Obama and Congress would negotiate the looming so-called "fiscal cliff." The biggest concern remains the low possibility of a compromise in a lame-duck session over a host of mandated budget cuts and tax cuts to end on 1 January 2013.

Fears of a lack settlement would unsettle markets and derail the economic recovery.