The Standard and Poor’s 500 stock index is facing its biggest drop since June, Reuters reported Wednesday, down more than two percent as markets opened on the heels of the U.S. Presidential election, which could mean no change in a gridlocked Congress, and more of the status quo for the struggling U.S. economy.
Sectors taking the heaviest hits included energy, healthcare, banking and defense spending, Reuters reported.
The biggest concern now facing traders around the world, is whether or not President Obama can make a deal with lawmakers and forge a plan to avoid the “fiscal cliff” that will kick in on Jan. 1, with its $600 million in tax hikes and spending cuts that the International Monetary Fund and the Federal Reserve say would probably send the country into a full-fledged recession.
Adding to that, an announcement by the European Commission that the euro zone’s economy is projected to grow a mere 0.1 percent next year, sent markets down. Critical to the health of the eurozone is beleaguered Greece, which is voting on an austerity package for 2013 this Sunday and is facing bankruptcy if it does not receive aid from the International Monetary Fund, and the European Union.
The Dow Jones industrial average fell 196 points to 13,046 points shortly after the opening bell. The Standard & Poor’s 500 index lost 17 points to 1,411 and the Nasdaq composite was off 37 points at 2,974, the Associated Press reported.