Investors didn't seem to like what President Obama had to say today. After he began his first press conference since winning re-election, the Dow Jones Industrial Average (INDEX: ^DJI ) fell by around 60 points, and by the end, the index had lost more than 100 points. Things only got worse from that point, and when the closing bell rang, the Dow sat at 12,570, down 185 points, or 1.45%, for the day. The president's speech made it clear that it won't be easy for Republicans and Democrats to agree on taxes and future spending before Jan. 1, the day we fall off the fiscal cliff.
Cisco (Nasdaq: CSCO ) was the only one of the Dow's 30 components to end the trading session in the green today. The company announced third-quarter earnings yesterday after the bell and managed to perform extremely well during its most recent quarter. Fool analyst Tim Brugger will walk you through what you need to know about the earnings report, by clicking here.
Now to the losers of the day. This afternoon, I discussed why Home Depot (NYSE: HD ) , Bank of America (NYSE: BAC ) , and Boeing (NYSE: BA ) all moved into the red. You can read about those three companies by clicking here or stick around to learn why the other 26 Dow components fell today and why I believe this was only the beginning.
So why did the Dow fall?
All 29 Dow components that fell today did so because of fears of the fiscal cliff. I could end this article here, but I'll give you a little more insight. Fool contributor John Maxfield noted today that Brian Moynihan and Jamie Dimon, respective CEOs of Bank of America and JPMorgan Chase (NYSE: JPM ) CEO, have both spoken about the effects of the fiscal cliff on investors and other CEOs. Everyone wants to know what is going to happen, and until they know, they're taking defensive actions.
When corporate leaders are concerned that the economy will turn sour, they begin to lay off workers, or at the very least stop hiring new ones. The upcoming jobs report should be a good indication of what the majority of businesses are doing and whether these fears have managers taking action. Corporate earnings in the third quarter were rather dismal across the board, but if we end the year without a political solution for the fiscal cliff, fourth-quarter earnings will be even worse, which leads us to investors.
When it comes to investors, simply looking at the Dow since the elections will tell you everything you need to know. When we learned the results, concerns became reality that the status quo gridlocked government now had to come together and agree on new policies that will have major implications on millions of Americans.
Since Nov. 6, the Dow is down nearly 700 points. Every day that goes by, investors and CEOs will become increasingly nervous and reduce jobs, and the sell-off on Wall Street is likely to continue.
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