Thanks a Lot, America. You Broke the Stock Market.
Nov 7th 2012 5:17PM
Updated Nov 7th 2012 5:22PM
The day after America voted President Obama back into a second term of office, the Dow Jones Industrial Average (INDEX: ^DJI) plummeted 2.4%. Are voters to blame for the drop in the Dow?
It's a natural assumption to make. But President Obama was president yesterday, too, and the market did just fine yesterday.
On the other hand, one of the biggest winners in the stock market today, and one of the few winners, period, was gunmaker Smith & Wesson (NAS: SWHC) -- up nearly 10% at market close. I think it's safe to say that this stock's price movement, at least, bears a direct correlation to investors who fear that government will soon be coming to confiscate our guns. (A fear that's been wrong in the past, and is wrong again now, I might add.)
Still, I suspect that few shareholders of Dow stocks have been as consistently hectored with fearmongering from the NRA, as have gun aficionados, and fans of S&W these past few months.
One other electoral factor worth considering: the election of Elizabeth Warren to the Senate. She was one of the driving forces behind the heightened regulation of America's banks, and a prime mover at the Consumer Financial Protection Bureau, so I think you can draw just as bright a line between Warren's victory and the declining share prices of Bank of America (NYS: BAC) and JPMorgan Chase (NYS: JPM) , as you can between Obama's victory and the decline of the Dow in general.
Oft-stymied in her attempts to regulate banking activities by the U.S. Senate when she was at CFPB, Warren is now Senator-Elect Warren and can arguably play a greater role in advancing her agenda from her new office.
In short, there's a reason B of A and JPMorgan are the two biggest losers out of the entire field of 30 Dow stocks today, down 7.1% and 5.6%, respectively. President Obama may be one reason for this. Senator Warren may be the other.
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The article Thanks a Lot, America. You Broke the Stock Market. originally appeared on Fool.com.Fool contributor Rich Smith has no positions in the stocks mentioned above. The Motley Fool owns shares of Bank of America and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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