Thanks a Lot, America. You Broke the Stock Market.

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 (Nasdaq: 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 (NYSE: BAC  ) and JPMorgan Chase (NYSE: 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.

To learn more about the most-talked-about bank out there (and whether it's now doomed), check out our in-depth company report on Bank of America. The report details Bank of America's prospects, including three reasons to buy and three reasons to sell. Just click here to get access.


Read/Post Comments (10) | Recommend This Article (22)

Comments from our Foolish Readers

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  • Report this Comment On November 07, 2012, at 5:32 PM, eddietheinvestor wrote:

    Yes, Rich, you are correct that President Obama was president yesterday. And he is president today as well. But investors did not know for sure yesterday morning that Obama would be president for another four years. For four years it didn't matter if the economy tanked because he could blame it on Bush. But can he blame Bush for eight years? Will people be okay with higher than 8 % unemployment for another 4 years, not including the millions who have been unemployed for so many years that they have given up? And in this term Iran did not complete their nuclear weapons program. But because Obama has done nothing to stop them (he tried harder to stop Jews from building apartments in Israel than to stop Iran from building a nuclear bomb), strife in the Middle East will raise gas prices and hurt the economy. The comment that Obama was president yesterday and again today seems flippant. We can only wait to see what the economy looks like in 4 years.

  • Report this Comment On November 07, 2012, at 6:05 PM, WelzyBacher65 wrote:

    Thank you "eddietheinvestor". I couldn't have said it any better!

  • Report this Comment On November 07, 2012, at 6:22 PM, blkmagik98 wrote:

    @eddietheinvestor In your story, you fail to mention the eight years we wasted in Iraq because of George Bush, when Iraq was never a problem. In the meantime, Iran was allowed to get that much closer to building a nuclear bomb and North Korea got there. So let's tell both sides of the story.

  • Report this Comment On November 07, 2012, at 6:51 PM, pomdter wrote:

    eddietheinvestor you hit the nail on the head. Any good Fool knows you buy a stock based on what it will be worth in the future. Obama has said he wants to lower that future value to make things more "fair", so the present value must compensate.

  • Report this Comment On November 07, 2012, at 8:07 PM, vrpirata wrote:

    "Thanks a Lot, America. You Broke the Stock Market", then America replies: "The stock market was disconnected from the reality of America anyways... so you are welcome"

  • Report this Comment On November 08, 2012, at 9:14 AM, shellij wrote:

    Do not invest in the stock market. Buy local. Go the local small business. If everyone pulled out of the stock. Then what.

  • Report this Comment On November 08, 2012, at 10:57 AM, Acesnyper wrote:

    Everyone pulling out of the stock market is about as real or plausible as no one get gas on Thursday.

  • Report this Comment On November 08, 2012, at 11:43 AM, drmutus wrote:

    What easier way to grow the middle class than to make the rich middle class.

  • Report this Comment On November 08, 2012, at 4:25 PM, savant55 wrote:

    It seems to me that the stock market is back in the throws of 1999 when investors did not base their buys on profitability but rather "good ideas". When it became obvious that good ideas don't make money, the market crashed. If this is not the case, then surely whatever anyone at the top says or predicts is the reason the market fluctuates and is so unstable. I got out of the market in 2007 when I smelled a rat and I think I smell the same one today.

  • Report this Comment On November 09, 2012, at 11:57 AM, aptosjoe wrote:

    For the last two years the agenda in Congress was to hamper and and flustrate the Executive. If you had a CEO and Board of Directors doing the same I would expect the company to fail. So it should be no surprise that the prospects for the Nation look dim. Unfortunately the stockholders voted to continue this situation. Any sensible person would sell. And a lot of them seem to be doing so.

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