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U.S. stock sink on reports of Biden tax proposals

Stock MarketsApr 22, 2021 03:10PM ET
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© Reuters. FILE PHOTO: A U.S flag is seen on the New York Stock Exchange in the Manhattan borough of New York City

By Herbert Lash

NEW YORK (Reuters) - U.S. stocks dived on Thursday on reports President Joe Biden planned to almost double the capital gains tax, but analysts said the news was an excuse to take profits in a listless market ahead of big tech's earnings next week.

The three main indexes on Wall Street were trending slightly lower when Bloomberg reported Biden also planned to raise income taxes for the wealthy, a proposal some said would be hard to pass in Congress.

"If it had a chance of passing, we'd be down 2,000 points," said Thomas Hayes, chairman and managing member at hedge fund Great Hill Capital LLC.

Biden will propose raising the marginal income tax rate to 39.6% from 37% and nearly double taxes on capital gains to 39.6% for people earning more than $1 million, sources told Reuters.

Markets have been listless as investors await guidance from Microsoft Corp (NASDAQ:MSFT), Google parent Alphabet (NASDAQ:GOOGL) Inc and Facebook Inc (NASDAQ:FB) when they report earnings next week, Hayes said.

"Until we get out of this information vacuum the market is going to be generally directionless," he said. "All that really matters moving forward is what are those big tech earnings next week?"

Earlier in the session the S&P 500 healthcare sector hit a fresh record high while industrials were the biggest gainers.

American Airlines (NASDAQ:AAL) Group Inc and Southwest Airlines (NYSE:LUV) Co reported smaller-than-expected quarterly losses, signaling a revival in travel demand. Both shares fell, with American down 3.3% and Southwest 0.2%.

Investors welcomed data showing the number of Americans filing new claims for unemployment benefits last week dropped to a fresh one-year low. The Labor Department report suggested layoffs were subsiding and expectations were rising for another month of blockbuster job growth in April.

Separately, data showed U.S. home sales fell to a seven-month low in March, as an acute property shortage boosted prices and made owning a house more expensive for some first-time buyers.

The speedy U.S. vaccination rollout has improved the economic outlook as people plan summer vacations or spending on leisure activities, while giving a solid start to the first-quarter earnings season.

However, a surge in COVID-19 cases in India and elsewhere in Asia has kept investors anxious, Hayes said.

The Dow Jones Industrial Average fell 0.89%, the S&P 500 lost 0.78% and the Nasdaq Composite dropped 0.74%.

Chipmaker Intel Corp (NASDAQ:INTC) is expected to post a drop in first-quarter revenue later in the day, with analysts looking forward to updates on its U.S. manufacturing plants and chips for automakers amid a global microchip supply shortage. Its shares fell 1.1%.

Declining issues outnumbered advancing ones on the NYSE by a 1.40-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favored advancers.

The S&P 500 posted 83 new 52-week highs and no new lows; the Nasdaq Composite recorded 83 new highs and 16 new lows.

U.S. stock sink on reports of Biden tax proposals
 

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Comments (35)
Anthony Anthony
Anthony Anthony Apr 22, 2021 7:27PM ET
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Did the Russians send biden to skkkrew Americans?
Semih Unalan
Semih Unalan Apr 22, 2021 4:15PM ET
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Ultra rich won't pay a dime. They'll just shift their residence and dump us citizenship. Canada may end up the net winner
Bev Mcguffee
Bev Mcguffee Apr 22, 2021 3:13PM ET
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How many more months until our country is “Bankrupt by Biden”?
Nelson Sunny
Nelson Sunny Apr 22, 2021 3:13PM ET
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Capitalism ******* communism rules
scott clawson
scott clawson Apr 22, 2021 2:55PM ET
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Its great to have an American President that wants to *******over the American people.
Dusty Owen
Dusty Owen Apr 22, 2021 2:51PM ET
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Biden had been an absolute disaster on all fronts. At least his tweets arent mean!
Todd Gray
Todd Gray Apr 22, 2021 2:37PM ET
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throw up a mountain chart and see how weak and frothy the tradings been lately. then go back to February and see how strong the moves were. look at todays dinky little candles. no strength to the upside.
Yousif Gopang
Yousif Gopang Apr 22, 2021 2:29PM ET
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i think dow jones increased day by day
Todd Gray
Todd Gray Apr 22, 2021 2:29PM ET
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even with reopening, right now the economy is way worse off than the bottom of the 08 crash. if not now, dip buying will soon end.
Todd Gray
Todd Gray Apr 22, 2021 2:22PM ET
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I think this is a major correction, if not the beginning of the crash. look at the 2 & 4 hour charts. and the 3 day yearly charts. very weak. big boys are out. charts are frothy, and no strength in the candles, except to the downside. panic could ensue really soon.
Todd Gray
Todd Gray Apr 22, 2021 2:18PM ET
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they have to revenue from somewhere, and they'll lose their power if they raise taxes on the majority of working people. we'd vote the Democrats out of the Senate in 21 months
Ron Love
Ron Love Apr 22, 2021 2:18PM ET
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The treasury had record revenues after Trump’s tax cuts. Money circulating the economy means more tax revenue.
Ac Tektrader
Ac Tektrader Apr 22, 2021 2:18PM ET
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ron !owe your post is based on false information the tax cuts did not pay for themselves.
Victor Menken
Victor Menken Apr 22, 2021 2:14PM ET
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He will be kicked out soon
Andy Prud
Andy Prud Apr 22, 2021 2:07PM ET
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yeah buy the dip xaxaxax
claire ge
claire ge Apr 22, 2021 2:03PM ET
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Time to go live somewhere else.
Joseph Armour
Joseph Armour Apr 22, 2021 2:02PM ET
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Because the rich democrats, of which almost all congressmen are, are going to pass such a bill. Please don't tell me you think the president can just raise taxes!
Nicholas Patchen
Nicholas Patchen Apr 22, 2021 2:02PM ET
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um... yeah they will... or lose face...most are on record in support of it..they will just move their money before it goes into place...just like everyone else
I Nyoman Suryasa
I Nyoman Suryasa Apr 22, 2021 1:57PM ET
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what the respond gold? up or down?
Md Shamim
Md Shamim Apr 22, 2021 1:55PM ET
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I have 4 short position in S&P 500 and Europe 50, should I close my position or wait till tomorrow, please suggest
Dru Zod
Dru Zod Apr 22, 2021 1:54PM ET
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Stocks down after a report that it will rain tomorrow; global warming to blame.
Jason Kam
Jason Kam Apr 22, 2021 1:54PM ET
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Tax the rich... Thats quite a china thing to do.
Alexxx Alexxx
Alexxx Alexxx Apr 22, 2021 1:53PM ET
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Biden is only a puppet! That's how Europe see him...all the world see him. How can be the president of a big country like us???? Honestly now many country think that Trump was better.. In the ent what matter are numbers and Trump got the numbers in term of economy, No War etc... All the others speaks well but they act bad!!
Atlantic Coast Money
Atlantic Coast Money Apr 22, 2021 1:51PM ET
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Lets go 📉📉📉
Andy Prud
Andy Prud Apr 22, 2021 1:50PM ET
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yeah but the dip xaxaxax
Duncan McTaggart
Duncan McTaggart Apr 22, 2021 1:50PM ET
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Such dishonest reporting
SARVESH SHARMA
SARVESH SHARMA Apr 22, 2021 1:50PM ET
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Reporting may be dishonest but market is right. it was a reason for correction. Markets all over world are overpriced only gullible people will suffer.
Duncan McTaggart
Duncan McTaggart Apr 22, 2021 1:50PM ET
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SARVESH SHARMA  market is doing this because it can, not because of this news. That is half the dishonesty. Big clouds of smoke from big investors who want us all to sell so they can buy our shares. This sort of political news doesn't actually drive markets - it's NOT pending reality (yet).
Jan Novy
Jan Novy Apr 22, 2021 1:49PM ET
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Well done, pay back time.
Paulo Silva
Paulo Silva Apr 22, 2021 1:48PM ET
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now it's because of Biden. for real ... who writes this pieces ?! in less than 30min. the market is down due to complete different things. make up your mind.
Me comment
Me comment Apr 22, 2021 1:47PM ET
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over reaction by market for a plan that has little to no chance of passing.
 
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