The stock market's plunge yesterday was so severe that it had many people hoping it would be just a one-day post-election phenomenon. But, troubles like the fiscal cliff aren't going to go away anytime soon and, after months of optimistic economic data, more investors now seem to be concerned that a reawakening of trouble in Europe could spread across the Atlantic and pull the U.S. economy down with it. After an initial bounce, stocks fell throughout the day and, by the close, the Dow Jones Industrials (^DJI 0.97%) fell 121 points.
A few stocks were particularly blameworthy for the Dow's losses. Cisco Systems (CSCO 1.33%) fell more than 2% in a bad day generally for technology stocks. Cisco reports quarterly earnings next Tuesday, and analysts expect a rise in earnings per share of $0.03, to $0.46, on about a 5% rise in quarterly revenue. With the company having beaten analyst expectations for 18 straight quarters, though, anything short of a solid performance from the stock could send it tumbling, especially given the market's skittishness.
McDonald's (MCD 0.33%) also fell about 2%, after reporting that same-store sales dropped 1.8% globally. The drop may not seem like all that big a deal given the overall problems in the global economy, but it marked the first time in nine years that the fast-food giant suffered a decline in comps. Until Europe picks up steam, and things settle down in the U.S., McDonald's could see continuing sales pressure.
Finally, United Technologies (RTX 0.80%) posted a 2% loss. Despite the overall strength of the commercial aerospace market, United Tech's defense exposure gives it at least some vulnerability to the fiscal cliff. Yet, as long as demand for aircraft remains strong -- as today's news of yet another multi-billion-dollar order for Boeing's (BA 3.00%) 737 MAX jets attests to -- United Tech, and its Pratt & Whitney, and Goodrich units should continue to thrive in the long run.
