(MENAFN - ProactiveInvestors - Australia) Investors hit the sell-button overnight with the major U.S. indexes suffering heavy losses as the fiscal cliff became a reality after the re-election of President Barack Obama, who once again is dealt a divided Congress.
The so called "fiscal cliff" is on the minds of investors as the deadline nears for lawmakers to agree on a package of measures.
The Dow Jones plunged below 13,000 points - for the first time in two months. By the close the Dow had tanked 260 points (-1.96%) to 12,986, while the NASDAQ sank 64 points (-2.14%) to 2948.
The biggest concern for markets now is that Congress will fail to reach an agreement on the so-called fiscal cliff facing the US next year.
The fiscal cliff refers to the more than 600 billion in tax hikes and spending cuts due to take effect in January, unless the Democrats and Republicans agree on a budget compromise.
Obama 303 to 206
President Obama won the election, with the electoral vote coming in at 303 versus 206 for Obama. Republicans took control of the House and Democrats took hold of the Senate.
U.S. Corporate News
Bank of America (NYSE:BAC) shares took a sharp hit Wednesday, due to concerns that financial institutions will see their businesses pressured on continued regulatory constraints under President Obama's rule. Shares were lately lower by more than 5.5%, while shares in Citigroup (NYSE:C) fell more than 4.4%.
Coal firms also took the plunge on the voters' choice, as as coal support was central to Republican challenger Mitt Romney's campaign. James River Coal Company (NASDAQ:JRCC) plummeted 22%, while Arch Coal (NYSE:ACI) dropped over 12.8%.
Meanwhile, healthcare stocks gained on Obama's re-election, with Tenet Healthcare (NYSE:THC) up almost 9%.
In corporate news, WellPoint (NYSE:WLP) beat Street estimates, as it reported adjusted profit of 2.09 per share, up from 1.77 a share a year earlier, topping views for the health insurer to earn 1.80 a share. Revenue was basically flat at 15.13 billion, as the company's medical enrollment fell 2.5% in the latest quarter. Shares were down more than 5.4% Wednesday.
Kraft Foods Group (NASDAQ:KRFT) saw its shares edge down as it reported its first quarterly results since it spun off its Mondelez International business. The food group reported third quarter earnings of 470 million, or 79 cents a share, up from 417 million, or 70 cents, a year earlier. Revenue rose 3% to 4.61 billion, with the company also standing by its outlook for 2013.
Time Warner (NYSE:TWX) beat analyst estimates for third quarter profit, with earnings of 86 cents a share, ahead of the consensus expectation for 82 cents a share. Revenue fell 3% to 6.84 billion, but the New York-based media company affirmed its full year outlook. Shares gained 3.7%.
Macy's (NYSE:M) said Wednesday its third-quarter profit rose, topping analyst views, and also boosting its full year guidance. For the third quarter, it posted a profit of 145 million, or 36 cents a share, from 139 million, or 32 cents a share, in the year-ago period. Revenue rose 3.8% to 6.08 billion. Wall Street analysts expected Macy's to earn 29 cents a share on sales of 6.08 billion, according to a survey by FactSet.
The department store retailer increased its fiscal 2012 earnings estimate to 3.35 to 3.40 a share, from 3.30 to 3.35 per share previously. Analysts are looking for full year earnings of 3.39 a share. Macy's also said it expects fourth-quarter profit of 1.94 to 1.99 a share, compared to the Wall Street estimate of 2.05 a share.
Shares of the company declined by 0.7%.
Beer maker Molson Coors Brewing Co. (NYSE:TAP) also said Wednesday its third-quarter adjusted profit rose to 1.37 a share from 1.14 a share. Sales rose 25% to just under 1.2 billion, due to the addition of the Molson Coors Central Europe operations, along with strong performance at the company's U.S. unit.
Wall Street analysts expected Molson Coors to earn 1.34 a share on sales of 1.25 billion, according to a survey by FactSet. The company warned of a challenging fourth quarter ahead, and shares fell more than 3%.