By Steve Goldstein, MarketWatch LONDON (MarketWatch) - U.S. stock futures dropped Wednesday as traders locked in profits and focused on the deteriorating economy that President-elect Barack Obama will inherit. Off the session's worst levels, S&P 500 futures fell 17 points to 986.40 and Nasdaq 100 ) futures fell 22.5 points to 1,358.00. Dow industrial ) futures slipped 124 points. U.S. stocks surged Tuesday in the run-up to the election, with the Dow Jones Industrial Average climbing 305 points, the Nasdaq Composite rising 53 points and the S&P 500 added 39 points. The S&P 500 closed above 1,000 for the first time in three weeks. Jim Dunigan, managing executive for investments at PNC Wealth Management, said the genuine hope from investors about Obama's victory may be short-lived. "We wake up this morning with the reality we have a number of challenges ahead of us," Dunigan said. After six straight rises, the FTSE 100 dropped 1.6% in London. Asian stocks improved, however, with the Nikkei 225 rising 4.5% in Tokyo. Analysts at UBS said the losers from a Obama victory would be big pharmaceuticals, managed care, upscale consumer firms, coal and coal-based utilities, domestic energy service companies, integrated oils and Bermuda-based insurers. Winners would be hospitals and nursing home operators, life sciences firms, natural gas companies, aggregates, solar firms and life insurers. PNC's Dunigan said it might not make sense, however, to make investment decisions based on the election. "The typical sectors you might think are vulnerable, when you overlay the economic landscape on it, it's more likely sectors that are less economically sensitive (may rise), and that leads you to staples, some of the healthcare names and biotechs." The dollar fell vs. the yen, and oil futures slipped $1.90 to $68.63 a barrel. Demonstrating the difficult environment, ADP estimated that 157,000 private-sector jobs were lost in October. Also due is the Institute of Supply Management's non-manufacturing survey for October and weekly energy inventory data. The media sector also will be in the spotlight amid earnings from Time Warner , which trimmed its earnings outlook after a virtually flat third-quarter profit, and after the close, News Corp. News Corp. owns MarketWatch, the publisher of this report. Bond insurers Ambac Financial and MBIA both reported widening losses. Ambac shares skidded 25% in pre-open trade; MBIA shares lost 16%. Cisco Systems reports results after the close. PNC's Dunigan said Cisco may benefit along with other IT companies with corporations investing to become more efficient.

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