Published November 07, 2012
FOX Business: Capitalism Lives Here
U.S. stock-index futures slumped Wednesday in volatile action as traders considered the implications of American elections that reaffirmed the status quo of a deeply divided Washington.
As of 8:09 a.m. ET, Dow Jones Industrial Average futures slumped 113 points to 13088, S&P 500 futures dipped 11.8 points to 1413 and Nasdaq 100 futures fell 23 points to 2653.
After one of the most contentious campaigns in recent memory, Democratic President Barack Obama beat out Republican challenger Mitt Romney to secure a second term as president. Polls leading up to the election showed the two locked in essentially a dead heat.
The sense of business as usual cascaded to Congress as well, where Republicans held control of the House of Representatives and Democrats held the Senate. As a result of the remaining sharp divisions in the White House and on Capitol Hill, market participants almost immediately shifted their focus to the looming fiscal cliff. The fiscal cliff refers to the painful spending cuts and tax hikes that will automatically go into effect in January should politicians in Washington, D.C. not get the nation's fiscal situation under control.
"Given the opposing views on the speed and degree of fiscal consolidation necessary, the status quo outcome implies difficult negotiations ahead on the fiscal cliff ... and the debt ceiling," analysts at Nomura wrote in a note to clients.
Traders were also paying close attention to Greece, where the country's parliament was set to vote on yet another austerity package aimed at easing its enormous debt burden. The vote is critical in securing another round of rescue aid from the European Union and International Monetary Fund and stave off a debt default that could send shockwaves through global financial markets.
Commodities sold off on the back of the weakness in futures markets. The benchmark crude oil contract fell $1.20, or 1.4%, to $87.50 a barrel. Wholesale New York Harbor gasoline slumped 1.3% to $2.664 a gallon.
In metals, gold jumped $6.90, or 0.39%, to $1,722 a troy ounce.
The Euro Stoxx 50 fell 0.56% to 2522, the English FTSE 100 dipped 0.25% to 5870 and the German DAX edged lower by 0.34% to 7253.
In Asia, the Japanese Nikkei 225 slipped 0.03% to 8973 and the Chinese Hang Seng climbed 0.71% to 22100.