Stocks are dropping across the board in a sell-off fueled by the failure of Speaker Boehner's "plan B," which never had a chance of becoming law anyway. Stockpile canned goods and ammo before the end of the world! Or was that supposed to happen a few hours ago?
Chill, people -- we're in the same place we were yesterday, when stocks jumped on hope that the president and Congress would reach a deal. The only reason the Dow Jones Industrial Average (DJINDICES: ^DJI ) and the S&P 500 (SNPINDEX: ^GSPC ) are down 1% each is fear, but we're still closer to a deal and in a better market than we were a week ago. In fact, both indexes are above last Friday's close, so the sell-off hasn't eaten away the week's gains.
There's not a single Dow stock in the black today, so I don't even have any good news to report. Banking and infrastructure stocks are taking the brunt of the fall today. Bank of America (NYSE: BAC ) is down 2%, while Caterpillar (NYSE: CAT ) and Alcoa (NYSE: AA ) are down 2.2% and 1.8%, respectively. The fear is that going over the fiscal cliff will push us into recession and hurt the fragile housing and construction markets, which would hurt business for these companies. The third quarter's strong growth contradicts that argument, and we may not see the dire consequences some people fear.
The fiscal-cliff talk is also pushing oil 1.6% lower and gold 0.7% higher on the day. This put a dent in ExxonMobil (NYSE: XOM ) and Chevron (NYSE: CVX ) , which fell 1.8% and 1.3%, respectively.
Like I said earlier, "plan B" was never going to pass in the first place, so the cancellation of its vote last night didn't really impact a deal that actually could pass. The market is just reacting to short-term fear that a deal won't be reached -- which spells opportunity for the savvy investor. The long-term thesis for stocks hasn't changed dramatically in the last 24 hours, so today's market dip may offer a great buying opportunity. Take that same mindset into the next two weeks as the market gyrates based on the day-to-day progress of negotiations.
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