The reelection of President Obama freed Wall Street to worry in earnest about the looming fiscal cliff as well as the euro zone crisis and the general global economic malaise.
The Dow Jones Industrial Average on Wednesday sank back below 13,000, falling 2.4 percent, or 312.95 points, to 12,932.73 as the S&P 500 Retailing Industry Group fared somewhat better, declining 1.5 percent, or 9.82 points, to 649.15.
Among the fashion and related companies getting hit the hardest were Tumi Holdings Inc., down 5.1 percent to $21.75; The Bon-Ton Stores Inc., 5 percent to $11.97; Elizabeth Arden Inc., 4.7 percent to $46.61; Tiffany & Co., 3.7 percent to $62.92, and Abercrombie & Fitch Co., 3.5 percent to $32.84.
Obama logged a decisive win in the electoral college, but still faces a divided legislative branch. Together the two sides will face automatic tax increases and spending cuts at the end of this year — what Federal Reserve chairman Ben S. Bernanke dubbed the “fiscal cliff.” Should the taxes kick in without modification, many see dire consequences for the U.S. economy, which is already limping along and being propped up by Fed debt purchases and ultralow interest rates.
“The political landscape has changed little after the elections,” said Nigel Gault, IHS Global Insight’s chief U.S. economist. “Some uncertainties, over health care reform and the Federal Reserve, have been cleared up by President Obama’s reelection. But crucial uncertainties over fiscal policy remain just as severe as before.”
Gault noted the Obama victory means his health care program will stay in place and that there won’t be big changes at the Fed.
“But the key uncertainties over the future of fiscal policy remain in place,” he said. “Divided government, as before, could be a recipe for complete gridlock.”
Markets were also down in Europe, where investors were closely watching the U.S. election.
Milan’s FTSE MIB fell 2.5 percent to 15,291.78, as Frankfurt’s DAX declined 2 percent to 7,232.83, Paris’ CAC 40 dropped 2 percent to 3,409.59, and London’s FTSE 100 retreated 1.6 percent to 5,791.63.
The decliners included Burberry Group, down 2.8 percent to 12.17 pounds, or $19.45 at current exchange; LVMH Moët Hennessy Louis Vuitton, 2.4 percent to 125.90 euros, or $160.73; Marks and Spencer Group plc, down 2 percent to 3.91 pounds, or $6.25, and PPR, 1.8 percent to 134.20 euros, or $171.33.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews