Investing.com - U.S. stock markets came under heavy selling pressure during early trade on Wednesday, as investor focus turned from U.S. President Barack Obama’s re-election to concerns over U.S. fiscal policy, while uncertainty over a Greek parliamentary vote also weighed on sentiment.
During early U.S. trade, the Dow Jones Industrial Average fell 1.4%, the S&P 500 dropped 1.45%, while the Nasdaq 100 slumped 1.45%.
Market sentiment found support overnight after President Obama was declared as winner of the U.S. presidential election.
Obama won 303 electoral votes, more than the 270 needed to secure a second term in the White House, while Republican challenger Mitt Romney won 206 electoral votes.
Obama’s election victory was seen as boosting the chances that the Federal Reserve’s policy of quantitative easing will remain in place.
But appetite for riskier assets weakened as investor attention turned to the fiscal cliff, USD600 billion of automatic tax hikes and spending cuts due to come into effect on January 1 unless lawmakers can reach an agreement, clouding the outlook for U.S. and global growth.
U.S. financial sector stocks were broadly lower, with Bank of America shares down 3.6%, JP Morgan declining 3.2% and Goldman Sachs dropping 3.7%
Meanwhile, comments from European Central Bank President Mario Draghi also weighed. Draghi said earlier that the euro zone’s ongoing debt crisis is beginning to have an impact on Germany, the region's largest economy.
Data released earlier in the day showed that German industrial production dropped 1.8% in September, compared to expectations for a 0.5% decline.
In Spain, industrial production tumbled 7% in September, almost double the decline expected by economists.
The European Commission cut its growth forecast for the euro area earlier. The 17-nation euro economy will grow by a meager 0.1% in 2013, down from a May estimate of 1%. It cut the forecast for Germany to 0.8% from 1.7%.
Markets now turned their attention to Greece, where country’s parliament prepared to vote on the latest rounds of austerity measures later in the day, which could determine if the debt-strapped country receives its next tranche of financial aid.
In earnings news, WellPoint saw shares drop 4% after the second-biggest U.S. health insurer said its enrolment fell more than 2% to about 33.5 million people compared to last year. The stock came under additional pressure after Bank of America downgraded it “underperform” from “buy”.
On the upside, Time Warner shares rose 4% after the media giant reported better-than-expected third-quarter earnings, boosted by a strong performance in its cable television channels.
Other stocks in focus included, CBS and Whole Foods, which were both expected to release earning reports after the closing bell.
Across the Atlantic, European stock markets turned lower, as sentiment weakened following the release of weak euro zone economic data and as investors looked ahead to a Greek parliamentary vote on an austerity bill.
The EURO STOXX 50 fell 1.6%, France’s CAC 40 dropped 1.45%, Germany's DAX declined 1.5%, while Britain's FTSE 100 shed 0.75%.
During the Asian trading session, Hong Kong's Hang Seng Index climbed 0.7%, while Japan’s Nikkei 225 Index was little changed.
Markets in Asia were eyeing the start of the Chinese Communist Party Congress on Thursday, where a once-in-a-decade leadership change is to take place.
Xi Jinping will probably replace Hu Jintao as general secretary of the party, with investors looking for clues on how the new leadership plans to address the nation's economic slowdown.
During early U.S. trade, the Dow Jones Industrial Average fell 1.4%, the S&P 500 dropped 1.45%, while the Nasdaq 100 slumped 1.45%.
Market sentiment found support overnight after President Obama was declared as winner of the U.S. presidential election.
Obama won 303 electoral votes, more than the 270 needed to secure a second term in the White House, while Republican challenger Mitt Romney won 206 electoral votes.
Obama’s election victory was seen as boosting the chances that the Federal Reserve’s policy of quantitative easing will remain in place.
But appetite for riskier assets weakened as investor attention turned to the fiscal cliff, USD600 billion of automatic tax hikes and spending cuts due to come into effect on January 1 unless lawmakers can reach an agreement, clouding the outlook for U.S. and global growth.
U.S. financial sector stocks were broadly lower, with Bank of America shares down 3.6%, JP Morgan declining 3.2% and Goldman Sachs dropping 3.7%
Meanwhile, comments from European Central Bank President Mario Draghi also weighed. Draghi said earlier that the euro zone’s ongoing debt crisis is beginning to have an impact on Germany, the region's largest economy.
Data released earlier in the day showed that German industrial production dropped 1.8% in September, compared to expectations for a 0.5% decline.
In Spain, industrial production tumbled 7% in September, almost double the decline expected by economists.
The European Commission cut its growth forecast for the euro area earlier. The 17-nation euro economy will grow by a meager 0.1% in 2013, down from a May estimate of 1%. It cut the forecast for Germany to 0.8% from 1.7%.
Markets now turned their attention to Greece, where country’s parliament prepared to vote on the latest rounds of austerity measures later in the day, which could determine if the debt-strapped country receives its next tranche of financial aid.
In earnings news, WellPoint saw shares drop 4% after the second-biggest U.S. health insurer said its enrolment fell more than 2% to about 33.5 million people compared to last year. The stock came under additional pressure after Bank of America downgraded it “underperform” from “buy”.
On the upside, Time Warner shares rose 4% after the media giant reported better-than-expected third-quarter earnings, boosted by a strong performance in its cable television channels.
Other stocks in focus included, CBS and Whole Foods, which were both expected to release earning reports after the closing bell.
Across the Atlantic, European stock markets turned lower, as sentiment weakened following the release of weak euro zone economic data and as investors looked ahead to a Greek parliamentary vote on an austerity bill.
The EURO STOXX 50 fell 1.6%, France’s CAC 40 dropped 1.45%, Germany's DAX declined 1.5%, while Britain's FTSE 100 shed 0.75%.
During the Asian trading session, Hong Kong's Hang Seng Index climbed 0.7%, while Japan’s Nikkei 225 Index was little changed.
Markets in Asia were eyeing the start of the Chinese Communist Party Congress on Thursday, where a once-in-a-decade leadership change is to take place.
Xi Jinping will probably replace Hu Jintao as general secretary of the party, with investors looking for clues on how the new leadership plans to address the nation's economic slowdown.