NEW YORK (AP) - Investors are dumping stocks as they turn their focus to a world of problems now that the election is over - tax increases and spending cuts that could stall the nation's recovery and a deepening recession in Europe.
The Dow Jones industrial average plunged 328 points to 12,916 at midday. The Dow was on track for its worst decline in a year.
The Standard & Poor's 500 index lost 36 points to 1,391. The Nasdaq composite fell 78 points to 2,933.
Energy companies and banks took big losses. Both industries presumably would have faced lighter regulation if Mitt Romney had won.
Stocks seen as benefiting from President Barack Obama's decisive win rose. They included hospitals, free of the threat that Romney would have rolled back Obama's health care law.
Meanwhile a dire warning for the Obama administration:
Fitch Ratings says President Barack Obama must pivot off his re-election victory and quickly forge an agreement with Congress to prevent a series of tax increases and spending cuts that kick in next year.
The credit rating agency issued a statement saying the president will have "No Fiscal Honeymoon." Fitch says Obama must work toward a credible plan to avoid the so-called fiscal cliff or risk losing the federal government's top 'AAA' rating next year.
The agency changed its outlook for the U.S. rating to negative last year after Congress and the Obama administration failed to meet a deadline for a plan. They face $600 billion in tax increases and spending cuts that go into effect on Jan. 1.
The government's failure to come up with a plan to reduce the deficit led Standard & Poor's to cut its rating of long-term U.S. Treasury securities last year from 'AAA' to 'AA+'. It was the first-ever downgrade of U.S. government debt.
Fitch says Obama and Congress also must reach a deal on raising the nation's borrowing limit.
The U.S. has never failed to meet its debt obligations. The battle over raising the debt limit in August 2011 went to the last minute before a compromise was reached.
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