Stocks fall. Obama win? No, Europe.

Stocks got a short-lived boost from Barack Obama's re-election Wednesday, but concerns over a divided Congress and grim economic news out of Europe left stocks poised for a retreat. 

By , AP Business writer

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    Barack Obama smiles after delivering his victory speech to supporters gathered in Chicago early Wednesday, Nov. 7, 2012. Stocks are poised for a retreat after a boost from Obama's re-election gave way to concerns over a divisive Congress and Europe's economic woes.
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The re-election of President Barack Obama gave stocks a short-lived boost Wednesday, before concerns over his ability to get a budget agreement from a divided Congress and more grim economic news out of Europe turned sentiment around.

Obama easily clinched a majority in the electoral college, holding on to a raft of key swing states in Tuesday's vote — despite only just winning the popular vote over his rival Mitt Romney.

Though America has been spared a re-run of the protracted election of 2000, its arms of government remain divided, with the Democrats holding onto their majority in the Senate and the Republicans in control of the House of Representatives. That could still lead to a logjam in policymaking, not least over the parlous state of the country's public finances, and that's unsettled investors.


In Europe, stocks gave up their morning gains. The FTSE 100 index of leading British shares was down 0.2 percent at 5,872 while Germany's DAX fell 0.4 percent to 7,358. The CAC-40 in France was 0.4 percent lower at 3,465.

Wall Street was poised for a retreat too in contrast to earlier predictions, with both Dow futures and the broader S&P 500 futures down 0.7 percent.




The turnaround in stocks markets was evident in currencies too— when risk appetite wanes, the dollar usually finds support. By early afternoon London time, the euro was 0.4 percent lower at $1.2754, a full cent lower than where it had been trading earlier.

Investors are also turning their gaze towards a crucial vote in the Greek Parliament later. If lawmakers don't back a €13.5 billion ($17.3 billion) package of spending cuts and tax increases, the country faces the prospect of losing access to its bailout lifeline and potentially defaulting on its mountain of debt and leaving the euro.






In the oil markets, a price of benchmark New York crude was down $1.21 to $87.51 per barrel in electronic trading on the New York Mercantile Exchange.

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