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Dow Slumps as Bulls Scatter on Reports of Biden Tax Hike

Stock MarketsApr 22, 2021 04:03PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The Dow fell sharply Thursday on reports President Biden is considering a major capital gains tax hike on the rich.

The Dow Jones Industrial Average fell 0.94%, or 342 points, the S&P 500 slipped 0.92%, and the Nasdaq Composite was down 0.94%.

Biden is reportedly contemplating almost doubling the capital gains tax hike up to 39.6% on higher income earner to fund child care and education proposals included in his so-called American Family Plan. 

The news rattled investor sentiment and dragged stocks further into the red, overshadowing another wave corporate earnings.

Southwest Airlines (NYSE:LUV) fell 1.6% after it estimated that it could achieve break-even by June, underpinned by strong leisure travel bookings into the summer months. The upbeat guidance offset mixed quarterly results as revenue fell short of estimates.

Las Vegas Sands (NYSE:LVS) slipped 4% as Wall Street sounded a cautious note on the company following its first-quarter results that missed on the bottom line.

Equifax (NYSE:EFX) reported first-quarter results that topped Wall Street estimates, sending its share price rose 15% higher.

The wave of mostly bullish corporate earnings come in the wake of a surge in cases globally that has cooled expectations over a faster reopening. India reported a record one-day surge in cases on Thursday.

In the U.S., however, Covid-19 cases continue to trend lower, with President Joe Biden confirming the country has achieved its 200 million vaccines milestone.

Improving economic data, particularly in the labor market, continues to reflect the success of the vaccine rollout that has led to a further reopening of the economy.

In the week ended April 17, 547,000 people filed for unemployment insurance, down 39,000 from the prior week's upwardly revised 586,000 and confounding economists' estimates for 610,000.

Energy stocks were sluggish despite oil prices recovering some losses as hopes for a recovery in demand remain fragile amid rising global infections.

Big tech, traded mix ahead of key earnings for the sector, with Intel (NASDAQ:INTC) due to report quarterly results after the closing bell.

Google-parent Alphabet (NASDAQ:GOOGL), Facebook (NASDAQ:FB), Amazon.com (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Apple (NASDAQ:AAPL) were in the red.

In other news, Citigroup (NYSE:C)'s sale of its retail businesses could reportedly bring in as much as $6 billion.

Dow Slumps as Bulls Scatter on Reports of Biden Tax Hike
 

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Comments (23)
Laurent Chavey
Laurent Chavey Apr 23, 2021 12:52AM ET
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maybe bidden could include factoring inflation in the taxable gains?
ZS Beck
ZS Beck Apr 22, 2021 9:10PM ET
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Biden has 4 years to ruin this country, but wait, he will do it in just 1.
Red Riley
Red Riley Apr 22, 2021 8:41PM ET
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how to ruin America in a 100 days. JB
Greg Hamilton
OptionsTrader Apr 22, 2021 8:26PM ET
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Yeah that's it... achieve the American dream only to give 40% to those looking for a handout.
New Jazenevd
New Jazenevd Apr 22, 2021 8:07PM ET
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It comes down to societal basics. A person, forced to pay 50+% tax, is entitled to detest the society and harm it as much as possible. It is a justifiable protest. Basically, 50%+ tax means slavery and slave masters do not deserve sympathies.
Show previous replies (2)
Jack Zhang
Jack_A Apr 22, 2021 8:07PM ET
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It is for wealthy people earning $1M from investment, not your salary.
New Jazenevd
New Jazenevd Apr 22, 2021 8:07PM ET
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Jack Zhang  Please, it is projected for families making 400k. Obamacare taxes start with even lower level. 400k means all income, including wages, it is not just investment.
Catholic Man
CatholicMan Apr 22, 2021 8:07PM ET
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Jack Zhang i don’t agree with stealing money from anyone.
Jack Zhang
Jack_A Apr 22, 2021 8:07PM ET
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Catholic Man so paying tax is stealing one's money? Laws/bills were and are set by the voted legislators. If the legislation passes a bill, then the majority supports it.
Jack Zhang
Jack_A Apr 22, 2021 8:07PM ET
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New Jazenevd  less than 5% household makes $400K+, see https://www.statista.com/statistics/203183/percentage-distribution-of-household-income-in-the-us/. Most people are fine. and those 5% people holds too much wealth and often influence/manipulate the market to make money.
krish va
krish va Apr 22, 2021 7:51PM ET
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the rich control the market so obviously they get upset and bring down the market. this system is just rigged against the middle class and poor.
German Villanueva
German Villanueva Apr 22, 2021 7:32PM ET
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America is all about Stimulus package programs Printing Fake Money. Bush, Bill Clinton, Obama, Trump & now Biden's printing money programs. Let the Economy Correct itself & Let Market Correct itself as well .Use the Fed instruments
Benjamin McIntire
Benjamin McIntire Apr 22, 2021 7:10PM ET
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Sounds good to me. Unless youre a mindless simp of the 1% then you know this benefits average Americans.
Barak David
Barak David Apr 22, 2021 6:53PM ET
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why couldn't they wait until the close of the day?
Seamus Hackett
Seamus Hackett Apr 22, 2021 6:53PM ET
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Lmao
Seamus Hackett
Seamus Hackett Apr 22, 2021 6:53PM ET
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Had to give the millionaires a chance to dump before the working class gets off work and checks their portfolios
Steve Austin
Steve Austin Apr 22, 2021 6:53PM ET
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So they could buy the dip.
CHAD TENDIES
CHAD TENDIES Apr 22, 2021 6:31PM ET
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Welcome to the BIDEN BEAR 🐻 MARKET 📉
Lake Lot
Lake Lot Apr 22, 2021 6:31PM ET
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Yep
Ac Tektrader
Ac Tektrader Apr 22, 2021 6:31PM ET
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this market is way over bought and has been since before the pandemic. it was juiced by Trump's unnecessary tax break that allowed most of the money to be used by corporations to buy back their own stock increasing corporate payouts to corporate and banking executives and according to tax experts ( after examining his business activities).to cut Trump's taxes by more than half.
Dusty Owen
Dusty Owen Apr 22, 2021 6:28PM ET
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Can biden touch anything without Messing it up? Hes just paving the way for Trump in 24. The country got what they voted for lol
Lorks Glordon
Lorks Glordon Apr 22, 2021 6:28PM ET
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biden is president in title only..takes his orders from pelosi gang!
Ani Lingus
Ani Lingus Apr 22, 2021 6:07PM ET
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check out new growing Eurpean company XTB - they target minimum 120K new users in 2021
Steve Lora
Steve Lora Apr 22, 2021 6:07PM ET
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This means those making 30k or less will be back on welfare or part-time minimum wage Obama jobs as cashier again
robert mandry
Rob2Trade Apr 22, 2021 6:04PM ET
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Its like Democrats are knowingly trying to destroy this country.
Kenneth nelson
grasshopper Apr 22, 2021 5:52PM ET
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Sniffer is a squirrel
Ad Cline
Ad Cline Apr 22, 2021 4:55PM ET
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higher tax rates on large Corporations have never hindered them from making lots of money. The higher tax rates during the 1990s and again in the Obama years, in both instances, didn't stop large Companies from producing the largest profits in most of their business histories.
robert mandry
Rob2Trade Apr 22, 2021 4:55PM ET
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Sure, large corporations will always make lots of money, but when you raise taxes, they'll make it with less employees, and less investment, which is how jobs are created. By raising taxes, that decreases their return on investment. When ROI goes down, they start searching for other places to invest that precious capital. Other countries, or other investments. bottom line, raising taxes is always a job killer. Have a conversation with a small biz owner.
krish va
krish va Apr 22, 2021 4:55PM ET
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maybe they should cut down on CEO salaries...their salaries are just vulgar.
Mario tragik
Mario tragik Apr 22, 2021 4:54PM ET
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lmao this wont pass. im buying this dip, cant lose.
David David
David9 Apr 22, 2021 4:53PM ET
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Looks like more taxes and more spending coming... this will collapse everything....
Amit Patel
Amit Patel Apr 22, 2021 4:53PM ET
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So cheap real estate and stocks. Looking forward to it.
Jack Livings
Jack Livings Apr 22, 2021 4:33PM ET
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This whole economy is based on monopoly money. This is an artificial economy that will vaporize as soon as the printing presses run out of paper.
Casador Del Oso
Casador Del Oso Apr 22, 2021 4:33PM ET
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I will be loading up on XOUT once the SP500 hits 2200.
Jack Livings
Jack Livings Apr 22, 2021 4:30PM ET
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With the S&P PE at the second highest in history it won't take much to spook a heavily leveraged market. When they exit it will be in a hurry.
kalob bowman
kalob bowman Apr 22, 2021 4:18PM ET
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lame
New Jazenevd
New Jazenevd Apr 22, 2021 4:16PM ET
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Certainly, dems destroy this country, moving it to 3rd world level. However, the market will not crash right away. Too much money printed. Every dip is still a buying opportunity.
Show previous replies (3)
New Jazenevd
New Jazenevd Apr 22, 2021 4:16PM ET
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Mike Wellons  That story about warren and his secretary was produced for feeble minded audience.
New Jazenevd
New Jazenevd Apr 22, 2021 4:16PM ET
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Jouni Matero  we did not get yet to the point when 1% works and pay taxes while 99% live on handouts. However, dems certainly move the country in this direction.
Mike Wellons
Mike Wellons Apr 22, 2021 4:16PM ET
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New Jazenevd Last time I checked 22% is greater than 15%
Mike Wellons
Mike Wellons Apr 22, 2021 4:16PM ET
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New Jazenevd It came from Warren Buffet himself, just ask him
New Jazenevd
New Jazenevd Apr 22, 2021 4:16PM ET
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Mike Wellons  ole warren loves preaching gospel to simpletons. However, it is not full story. Also, lying media conveys his preaching selectively, amplifying progressive spots.
 
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