Wednesday’s Market Recap: US Stocks Refrain From Celebratory Session Post Obama Victory

Stocks fell off of Super Tuesday’s gains after the economy contracted to prepare for the upcoming shift in power to the Democratic party. The Dow (^DJI) completely wiped out yesterday’s increase, and then some, by dropping 486 points, or 5.05% today. Similarly, the Nasdaq (^IXIC) and S&P (^GSPC) also responded negatively to investors’ worries about an Obama economy, and fell 5.53%, and 5.27% respectively. Oil took a hit coming off of yesterday’s unjustifiable increases, and after the EIA released their weekly supply report that stated an increase in the supply of oil by 0.1 million barrels. This, coupling with the fear of Obama’s “War on Big Oil,” drove the energy sector and commodity prices lower. December futures for sweet crude traded down over 7%, around $65.14 per barrel. Obama’s pledge to increase natural gas usage drove nat. gas futures slightly higher today. Prices traded around $7.27 per MMBtu. Gold fell to $740.00.

While the United States refrained from a celebratory bullish session over the Obama victory yesterday, Asian markets climbed higher on a stronger dollar. The Nikkei advanced 4.46%, while the Hang Seng and the Shanghai both jump slightly over 3% during the Asian market hours. One U.S. Dollar is now trading around 98.7 yen range.

European stocks dropped for the first time in seven days, reflecting negative earnings releases from large corporations like BNP Paribas (BNP) and Arcelor Mittal (MT). The FTSE (^FTSE) dropped 2.34% on Wednesday. The dollar continues to rise against the euro in the currency market, and is worth approximately 0.7739 euros.

Panasonic (PC) and Sanyo (SANYY.PK) will both hold board meetings this Friday to discuss a potential takeover. Not only would both companies likely benefit from a Sanyo takeover, but Sanyo’s largest shareholder, Goldman Sachs (GS), would also profit from the deal. Sanyo controls about 30% of the lithium-ion battery market.  These are the same type of batteries that are going to be used in many of the new hybrid cars.

Shares of Yahoo (YHOO) sprang as much as 10% during the trading session today on speculations that Microsoft (MSFT) will re-open talks with the ailing search engine after the deal with Google (GOOG) fell through. After the rumor was dispelled, the stock still ended up above 4%.

Time Warner (TWX) announced third quarter earnings beat expectations by $0.03, and posted an increase in revenue of 0.3% to $11.71 billion. Time Warner Cable also beat their expected earnings by $0.03, and posted earnings per share of $0.30.

MySpace owner, News Corp (NWS), posted first quarter earnings for their fiscal year of $0.20 per diluted share. NWS missed expectations by $0.03.

Disclosure: The fund the author is associated with holds long positions in GS, MSFT, and GOOG.

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