Stocks fall on post-election worries about fiscal cliff WASHINGTON - Financial markets plunged as concerns about Europe's economy combined with the morning-after reality that the U.S. elections left the same gridlocked politicians to deal with the fast-approaching fiscal cliff. The Dow Jones industrial average fell 313 points, or 2.4%, on Wednesday to its lowest level in three months. The broader Standard & Poor's 500 index also ended the day down 2.4%, and the Nasdaq was off 2.5%. Investors worried that another recession loomed next year unless newly reelected President Obama and still-strong congressional Republicans could stop the large tax hikes and government spending cuts that kick in Jan. 1. "We've gotten certainty on the presidency and now we move into the uncertainty of where we were before - the fiscal cliff," said Quincy Krosby, market strategist at Prudential Financial. Sectors in Washington's fiscal or regulatory cross-hairs - defense, healthcare, energy and financial - took drubbings. Big banks, which are subject to many new financial rules championed by Obama, got hammered. Goldman Sachs Group Inc. lost $8.27, or 6.6%, to $117.98. JPMorgan Chase & Co. lost $2.40, or 5.6%, to $40.48. Morgan Stanley plunged $1.56, or 8.6%, to $16.63. And UnitedHealth Group Inc., the health insurance giant, lost $2.13, or 3.8%, to $54.26, as hopes for a repeal of Obama's healthcare reform law faded with his reelection. More signs of trouble regarding the European debt crisis also pushed markets lower. European Central Bank President Mario Draghi said new data indicated that the fiscal problems were starting to affect Germany, the Eurozone's strongest economy. Growth forecasts for the region were downgraded. And riots broke out in Greece ahead of the Greek parliament's narrow approval of a tough new round of spending cuts. But most of the attention was on Washington. Fitch Ratings, one of the three leading credit rating companies, highlighted the stakes facing politicians in the coming weeks. The firm declared there would be "no fiscal honeymoon" for Obama, warning that the U.S. probably would face a ratings downgrade if a deal could not be brokered to stave off the fiscal cliff and to increase the nation's debt ceiling again. Business leaders said that with the bitter presidential and congressional elections over, it was time for Democrats and Republicans to join together and prevent another fiscal crisis. "The most important mandate coming out of this election is fixing the problems we knew we had to fix," said Jay Timmons, president of the National Assn. of Manufacturers. The challenge is huge. At the end of the year, the George W. Bush-era tax cuts and the temporary payroll tax break expire. At the same time, deep automatic spending cuts are mandated by law to reduce the deficit. The Congressional Budget Office and most economists believe the one-two fiscal punch - about a $500-billion blow to the economy next year - would trigger another recession. Treasury officials said they could take steps to allow continued borrowing, but the nation would face a possible default early in 2013 if the limit isn't increased. Thus far, there's little evidence that concerns about higher taxes have had a significant effect on American consumer spending. But going over the cliff could jolt confidence as middle-income families would see their taxes increase by almost $2,000 next year. Renewed concerns about the fiscal cliff come as the recovery is showing signs of strengthening a bit. The housing market is coming back to life, consumers are spending more for cars and other things, and hiring has picked up in recent months. The unemployment rate fell below 8% this fall for the first time since early 2009 and now stands at 7.9%. Yet even if lawmakers push off many of the spending cuts and tax increases, analysts at PNC Financial Services see some fiscal contraction. They expect the Social Security payroll tax to go back up to 2010 levels. "This will weigh on growth, particularly in the first half of next year, a major reason why the recovery will remain moderate in the near term," they said in a research note Wednesday.