Obama Win Fails to Lift Wall Street

The Dow Jones industrial average had lost 329.5 points to 9,295.78 by 2.15pm in New York, despite hopes that the markets would return to normality after the long battle for the US Presidency was eventually won last night by Barack Obama. Within minutes of opening, however, the Dow had already plunged by 120.51 points to 9,504.77.

Yesterday, US stocks soared by more than 300 points as investors looked forward to the end of the race for the White House, with Mr Obama in poll position to win.

Today, however, sentiment was dented by poor employment figures that showed that US companies cut an estimated 157,000 jobs in October, well above expectations and the highest level in six years, according to new data from ADP Employer Services.

The decline in employment compares to a revised 26,000 decrease in jobs in September and an expected drop of 102,000 for October.

The job losses have occurred across the board, with carmakers, retailers and companies relating to the housing market suffering particularly badly.

The ADP data showed a decrease of 126,000 jobs in goods-producing industries, which include manufacturers and construction companies. Service providers eliminated 31,000 positions. Employment in construction fell by 45,000.

The ADP data comes two days ahead of the Labour Department's payroll report, which is expected to show that total payrolls fell by 200,000 last month and that the unemployment rate rose to a five-year high of 6.3 per cent.

Private payrolls dropped by an average of 108,000 a month in the year to October, according to the Labour Department.

London shares mirrored Wall Street, with the FTSE 100 falling to close down 108.7 points to 4,530.73, reversing a large chunk of yesterday's 4 per cent gain on the US election and the hoped-for effect of stabilising the economy, as well as hopes the Bank of England will cut interest rates tomorrow.

Overnight, the result of the US election sent shares in Asia soaring.

The Nikkei had climbed nearly 4.5 per cent by the closing bell, while the Hang Seng shot 5.7 per cent, or 812.53 points, higher. Even the Shanghai exchange, whose movements tend not to track the rest of Asia, jumped more than 4 per cent.

Source: TimesOnline.co.uk