US stocks ended a roller-coaster week lower, hitting a big election-day rally Tuesday only to plunge after President Barack Obama defeated Republican challenger and Wall Street ally Mitt Romney.
While the election removed one uncertainty hanging over the markets, it bared the 'fiscal cliff' that is looming just 53 days away and threatening to drive the economy back into recession.
Voters left Congress still divided, with Democrats holding the Senate and Republicans the House of Representatives, stoking fears that political gridlock will continue to block a deficit reduction deal.
'The market reaction to the re-election of president Obama and Republican control of Congress was swift and clear: 'Partisan brinkmanship is scaring the hell out of us!'' said Nigel Gault and Paul Edelstein at IHS Global Insight.
The Dow Jones Industrial Average put in a third straight week in the red. The 30-stock blue-chip index shed 2.12 per cent over the week, finishing Friday at 12,815.39 points.
The tech-rich Nasdaq dove for the fifth week running, losing 2.60 per cent at 2,904.87 points.
And the SP 500, a broad measure of the markets, lost 2.43 per cent at 1,379.85 points.
The day after the elections, both the Dow and the SP 500 plunged 2.4 per cent, and dropped another one per cent on Thursday.
Without a compromise, the 'fiscal cliff' - automatic severe spending cuts and tax increases that were agreed last year as an unthinkable action that would push the two sides to reach a deal on fiscal tightening - will take effect January 1.
With a disappointing third-quarter earnings season winding down, the battle in Congress over averting the 'fiscal cliff' looked likely to dominate Wall Street's attention for weeks to come, analysts said.
However, a few major companies have yet to weigh in with earnings, such as computer network giant Cisco on Tuesday and Wal-Mart, the world's biggest retailer, on Thursday.
Adding to Wall Street jitters was the eurozone's entrenched public debt crisis, with Greece scrambling to avoid default and ailing Spain unwilling to ask for a bailout stoking uncertainty.
Among stocks in focus this week, travel website Kayak surged 27.8 per cent on Friday after agreeing to be bought by rival Priceline (-0.3 per cent) in a stock-and-cash deal worth $US1.8 billion ($A1.74 billion).
Groupon shares plunged to their lowest level since the online deals giant went public a year ago, as analysts offered a harsh response to a disappointing earnings report.
The company tumbled 29.3 per cent to close at $2.77 - down some 85 per cent from the $20 public offering price one year ago.
There were some bright spots in the US economic picture this week that supported the outlook for continued moderate growth.
Consumer sentiment improved in early November to its highest level since July 2007, a positive sign just ahead of the crucial year-end holiday shopping season.
The nation's trade deficit unexpectedly shrank in September as exports hit record highs, sending analysts revising their third-quarter growth estimates higher.
Growth slowed slightly in the massive services sector in October, but remained at a solid pace with a pickup in hiring for the third month, according to the Institute for Supply Management.
Next week's economic calendar heats up, with retail sales, the minutes of the Federal Reserve's last policy meeting and the producer price index all due on Wednesday.
Thursday brings the consumer price index and weekly jobless claims data, followed by Friday's industrial production report.