Market Insider

Next Up for Markets? The Fiscal Cliff

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President Barack Obama's re-election could mean a tough road for stocks unless there's some sign soon that he and Congress will avoid taking the economy and the country off the "fiscal cliff."

Stock futures were weaker late Tuesday but were off lows as n the tight race against Mitt Romney. Futures regained more ground when Romney conceded, removing the chance of a challenge that would cloud the outcome and lead to a period of uncertainty. Democrats also retained control of the Senate, leaving in place a divided Congress.

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"I clearly thought that a status quo election was negative," said Barry Knapp, head of equity portfolio strategy at Barclays. "We've had business confidence falling sharply. We've had capital spending contract. You can see it in the performance of tech stocks and industrials and in corporate earnings, and I think this is a negative outcome."