Obama securing a second term means the Bush-era lower tax rate on qualified dividends for wealthier investors could be allowed to expire at the end of the year, analysts say. [Dividend ETFs: What Obama Win Means for Tax Rates]
“While the tax-rate change is freaking investors out, there are other issues likely playing a role. The sell-off may reflect the fear of regulatory wrath after excessive outages following Sandy,” Brochstein added. “Additionally, there is a school of thought that regulators may push down allowable returns in a lagged response to the lower interest-rate environment.”
Utilities Select Sector SPDR
Full disclosure: Tom Lydon’s clients own SPY.