US stocks have fallen heavily on Wall Street putting the S&P 500 on track for its biggest drop since June, as investors shifted their focus to a looming fiscal showdown in Congress after President Barack Obama's re-election.
Energy, healthcare and the banking sectors were among the hardest hit after Obama defeated Republican Mitt Romney, whose policy positions favored those industries. Defense shares also plunged.
Adding to the weaker sentiment were renewed worries about economic troubles in Europe, a key market for many US companies. The euro zone economy will barely grow next year but pick up in 2014, the European Commission said. The region's economy would grow only 0.1% in 2013 after a bigger than previously forecast contraction this year.
Wednesday's drop is a reversal from the prior session's gains when voting was under way. Defense and energy shares were among the market leaders that day.
An index of defense shares was down 3.8%, its biggest one-day drop in a year. Shares of United Technologies were down 3.5%.
Washington must next focus on some $600 billion in spending cuts and tax increases due to kick in next year that could derail the economic recovery, hence the "fiscal cliff" nickname.
Among sectors, the S&P energy index dropped more than 3% as investors fear companies in the sector will likely see more regulation in Obama's second term, with less access to federal lands and water.
