Stocks Follow Election With Selloff

Mendelsohn also said that he's seeing a rebalancing of asset allocation as investors have begun buying what they see as underpriced stock. He says that a Dow level of 9650 is a resistance level, and stocks will have to consolidate before they can go any higher.

Several corporate headlines were detracting from buying sentiment. Aircraft maker Boeing (BA Quote) announced that its 787 Dreamliner program was suffering delays because it needs to replace improperly attached fasteners on the new jets.

In the technology space, Internet company Google (GOOG Quote) announced on its blog that it would end an advertising agreement with fellow Web portal Yahoo! (YHOO Quote). Google cited government regulators' and some advertisers' concern about the agreement as reason for the termination.

Elsewhere, homebuilder KB Home (KBH Quote), cut its quarterly dividend 75%, citing a goal of maintaining a strong financial position.

Media reports also indicated pharmaceutical company GlaxoSmithKline (GSC Quote) would cut nearly 1,800 sales jobs as it restructures its operations.

On the merger front, specialty chemicals maker Hercules (HPC Quote) announced that its shareholders approved a merger deal with Ashland (ASH Quote).

Another day brought additional earnings statements. Time Warner (TWX Quote) reported a slight drop in third-quarter earnings and reduced its 2008 earnings forecasts because of additional restructuring it expects to incur.

Bond insurer Ambac (ABK Quote) reported a third-quarter loss that was substantially wider than a year ago. A bit later Wednesday, fellow insurer MBIA (MBI Quote) is expected to report.

Steel maker ArcelorMittal (MT Quote) announced earnings that increased 29% and said it would reduce production for the fourth quarter thanks to an economic downturn.