Mr. Market Votes

In one part of the world at least, the euphoria over the U.S. presidential election has already dissipated: the stock market.

After its biggest Election Day rally ever, the major stock market indexes are down about 3 percent in afternoon trading. Dismal private reports on employment and on the service sector have served to underscore just how weak the economy is and how tough the challenges will be for Barack Obama.

The 30-stock Dow Jones industrial average is heading for its worst post-presidential election close since 1948, according to the Bespoke Investment Group. Then, after Harry Truman had defied the polls and defeated Thomas Dewey, the Dow fell 3.85 percent.

The last time around, the Dow rose 1.01 percent after Bush's reelection. In 2000, the outcome still unknown, the Dow slipped just 0.41 percent.

This election itself didn't provide much reason for the market to surge one day, only to fall back the next. Polls had been pointing to an Obama victory for weeks and there were no big surprises last night.

And while stocks have shown some signs of steadying of late as the credit markets thaw and some of the uncertainty over the government's response to the financial crisis eases, the overall trend continues to be down. The Dow is down 34 percent since hitting its high in October 2007.

It may just be coincidence, but the Bespoke Investment Group data shows only significant Dow declines the day after a presidential election when a Democrat is elected. The Dow fell 2.39 percent after Franklin Roosevelt was reelected in 1940, ad it tumbled 4.51 percent when he was first elected in 1932.