BIGGEST POST-ELECTION DROP EVER
The Dow plummeted on Wednesday, a day after Barack Obama's historic victory, as a fresh batch of dismal economic data underscored the massive challenges awaiting his administration.
The drop marked Wall Street's biggest loss ever on the day after a presidential election, coming immediately on the heels of its biggest Election Day rally on record in the previous session.
Year Winner Dow Selloff
1) 2008 Obama -5.05%
2) 1940 F.D.R -2.39%
3) 1976 Ford -0.99%
4) 1992 H.W. Bush -0.91%
5) 1984 Reagan -0.84%
Selling hit across the board, with shares of big manufacturers, including Boeing , as well as banks, technology companies, home builders, retailers and energy companies among the biggest casualties.
Investors worried the new administration won't be in a position to act fast enough to avert a deep economic downturn.
Strategy Session with the Fast Money Traders
This was a bad day on a fundamental and technical basis, exclaims Jeff Macke. It’s never good when the head of ArcelorMittal the world's largest steelmaker says global demand is falling off a cliff.
The Wolf also noticed that the market took a notable turn lower when House Speaker Nancy Pelosi told a news conference additional economic stimulus may be needed once Obama takes office in January.
The Dow is trading in a range, says Guy Adami. It’s between 7500 and 9600. After Wednesday's sell-off I think it heads back down
The market action on Wednesday was all profit taking, adds Pete Najarian. Stocks such as First Solar had quite a run over the last 5 days and they led us lower on Wednesday. However I’m hopeful the next rally will be sustainable because the VIX is coming down.
The only way to play this market is take profits fast or not play at all, adds Macke.
AFTER HOURS ACTION: WELLS FARGO
After hours shares of Wells Fargo fell about 3% after the bank announced a proposed offering of $10 billion of common stock to the public. Meanwhile financial services stocks led Wednesday's sell-off with Goldman and Morgan Stanley taking a late day hit.
Wells had said they would do the raise, explains Karen Finerman. However I thought they would do it when they closed the Wachovia deal. The timing seems strange.
AFTER HOURS ACTION: CISCO
Cisco Systems, which posted essentially flat earnings for its latest quarter, saw its stock plunge after-hours after forecasting a sharp decline in revenue for the current quarter.
CNBC’s Jim Goldman explains that Cisco saw a 9% decrease 'year over year' in orders. And CEO John Chambers said this is a difficult time in which to forecast, however he expects a decrease in revenue.
That’s grim, says Jeff Macke. He usually so optimistic.
If there’s a decrease in revenue expect a hit to future earnings, adds Karen Finerman.
On Tuesday Credit Suisse cut their forecast on Cisco, reminds Pete Najarian. These results shouldn't be a huge surprise.
GLOBAL RECESSION FEARS BUILDING
Oil dropped 7 percent to below $66 a barrel on Wednesday after a U.S. government report showed fuel stockpiles growing as demand slowed further.
Another negative sign came from ArcelorMittal the world's largest steelmaker which said third-quarter results missed forecasts, and that it’s put growth plans on hold.
The global growth story is bad, says Guy Adami. I’m sorry to say it, but it’s a real issue.
I’m not bearish on equity prices in this sector, adds Karen Finerman. They’re already pricing in recession. I’d get long the OIH and hedge the best with short the USO because if global demand is dropping the price of oil should head lower.
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Trader disclosure: On Nov.5, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (BTU), (GS), (MSFT), (INTC), (NUE); Macke Owns (WMT), (MSFT), (DIS), (UUP), (SDS); Pete Najarian Owns (BNI) Puts: Pete Najarian Owns (CHK) Call Spread; Pete Najarian Owns (YHOO) And Is Short (YHOO) Calls; Finerman's Firm Owns (UFS), (MSFT); Finerman's Firm Owns (OIH) Puts; Finerman's Firm Is Short (WFC), (IYR), (IJR), (IWM), (SPY), (USO), (MDY), (GNK)
CNBC.com with wires