Katherine

e news" reaction to what most on Wall Street expected. Others claim the market is showing its displeasure with the incumbent, even though the S&P is up more than 50% since Obama took office in2009.
"I'm not so real convinced this is some kind of reaction to Obama reelection," says my Breakout colleague Jeff Macke. "If you bet on the favorite which is what Obama was you don't get to gloatafter. The market expected this."
Rather than the election news, stocks are taking their cues from those time-tested catalysts: Europe's debt crisis and the dollar.
Ahead of a critical austerity votein Greece, European bourses and the euro were down sharply Wednesday. Cautious comments by ECB President Mario Draghi about Germany's economy and the European Commission cutting its growth forecastfor the eurozone to just 0.1% for 2013 vs. 1% in May cast a further pall on the continent.
In response, the euro hit a two-month low at $1.2734 and the U.S. Dollar index hit a two-month high. Generallyspeaking, so-called risk assets such as stocks and commodities have been moving in opposition to the dollar, so dollar strength is the enemy of the bulls -- at least for now.
Markets are alsotrading on the prospects of a resolution for the so-called fiscal cliff.
As I discuss in the accompanying video with Macke, Henry Blodget and Michael Santoli, the market is fearful that Obama's reelectionmeans a continued stalemate in Washington, where the Republicans maintain control of the House.
House Speaker John Boehner (R-Ohio) is expected to give a statement this afternoon that will call onboth sides to seek "common ground," The Hill reports.
But with President Obama already saying he'll veto any agreement that doesn't raise taxes on the wealthiest Americans — one of his key campaignpromises — and Republicans saying they won't agree to any tax hikes (period), it's hard to see a consensus emerging anytime soon.
The consensus remains that some deal will be reached prior to Dec. 31...