Markets get whacked in post-election trading

It was the biggest one-day loss in a year as the Dow plunged 312 points and fell below the 12,000 level - and it came the day after the index gained a respectable 132 points. Seems that one kind of uncertainty (the election) was resolved, but replacing it were other uncertainties - mainly the prospect of tax increases and spending cuts if Congress and White House cannot come to terms on a spending package. There are also worries about the Obama administration getting tougher on financial regulations, and of course Europe is still struggling. The Dow is still up almost 6 percent on the year, but the last month or so has been rocky, as you can see by the CNNMoney chart From the WSJ:

In a report Wednesday, Fitch Ratings said that failing to avoid the fiscal cliff would tip the U.S. economy into an avoidable recession and result in an increase in the unemployment rate to above 10% in 2013. "Failure to avoid the fiscal cliff and raise the debt ceiling in a timely manner, as well as securing agreement on credible deficit reduction, would likely result in a rating downgrade in 2013," Fitch said. Remarks late in the trading day by Republican House Speaker John Boehner, suggesting that he was open to compromise with the president, did little to assuage investor concerns, with stocks sinking lower after his remarks.