Dow Slumps as Bulls Scatter on Reports of Biden Tax Hike

imageStock Markets49 minutes ago (Apr 22, 2021 04:03PM ET)

(C) Reuters.

By Yasin Ebrahim – 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), (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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