Stocks head for sell-off after election

Foreign markets drop slightly

NEW YORK - U.S. stock futures turned lower Wednesday morning as investors shifted focus to how President Obama plans to avoid the fiscal cliff after he won re-election Tuesday night.

The Dow Jones industrial average, Nasdaq and S&P 500 futures were down 0.8%.

Wall Street was overwhelmingly in favor of Mitt Romney, the Republican challenger with close ties to the private equity and business communities. Plus, investor attention is quickly turning to what Tuesday's results mean for the looming fiscal cliff, the market's biggest headwind, according to market strategists and money managers.

If lawmakers fail to address the simultaneous onset of tax hikes and spending cuts that will be triggered on Jan. 1, they risk throwing the U.S. economy back into a recession and drive unemployment up even higher.

Following a morning rally, European stocks sold off in afternoon trading. Britain's FTSE 100 and the DAX in Germany added 0.6%, while France's CAC 40 rose 1%.

Asian markets shaved morning losses after Obama's win was declared, as investors considered that Obama's is likely to ensure continuity in monetary policy in the near term. The Shanghai Composite and Japan's Nikkei finished little changed, while the Hang Seng in Hong Kong rose 0.7%.

A victory by Romney, who had been highly critical of Fed chairman Ben Bernanke, would have resulted in more uncertainty about whether the Federal Reserve's loose monetary policies. The Fed's low interest rates and bond buying programs have largely been credited for boosting the market during the past three years.

The dollar initially eased against the major world currencies but reversed course. The dollar rose 0.6% against the euro and 0.2% versus the British pound. The dollar declined slightly against the Japanese yen.

Investors also continued to eye corporate news. CNNMoney parent Time Warner posted a higher-than-expected profit for the third quarter thanks to strength in its cable networks.

Macy's topped earnings expectations, but missed on revenue. Shares of the retailer slipped in premarket trading.

Late Tuesday, News Corp. reported solid quarterly results.

On Wednesday afternoon, the Federal Reserve will release data on consumer credit for September, which is expected to have expanded by $10.6 billion, according to a survey of analysts by Briefing.com.

U.S. stocks finished higher Tuesday.

Commodities: Oil for December delivery fell $1.26 to $87.45 a barrel.

Gold futures for December delivery gained $5 to $1,720 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury edged higher, pushing the yield down to 1.64% from 1.74% late Tuesday.