Financial Flip-Flop?

"Stocks Close Lower As Investors Question if Democratic Congress Will Be Friendly to Business"

The evidence is quoted as:

"The market's been looking for a reason to go to the downside, and a change in Washington is as good an excuse as any," O'Donoghue said.

Iowa Markets had the Democrats gaining control of the House since early October. The Senate flipped Democratic on Monday. Which means one of:
1) The efficient market theory is wrong and the markets took until today to react to this news
2) The AP is talking smack and today's drop has nothing to do with Washington
3) I am an idiot that failed to act upon globally unknown non-insider information

In honor of the mis-understood genius:

The Unknown

As we know,
There are known knowns.
There are things we know we know.
We also know
There are known unknowns.
That is to say
We know there are some things
We do not know.
But there are also unknown unknowns,
The ones we don't know
We don't know.

—Feb. 12, 2002, Department of Defense news briefing