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US STOCKS-U.S. stock sink on reports of Biden tax proposals

Thu 22nd April, 2021 7:53pm
* AT&T rises on strong quarterly results
    * Southwest Airlines rises on smaller-than-expected loss
    * U.S. weekly jobless claims decline further
    * Indexes down: Dow 0.89%, S&P 500 0.78%, Nasdaq 0.74%

 (Adds prices to mid-afternoon)
    By Herbert Lash
    NEW YORK, April 22 (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  MSFT.O , Google parent Alphabet Inc  GOOGL.O 
and Facebook Inc  FB.O  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
    Earlier in the session the S&P 500 healthcare sector
 .SPXHC  hit a fresh record high while industrials  .SPLRCI 
were the biggest gainers. 
    American Airlines Group Inc  AAL.O  and Southwest Airlines
Co  LUV.N  reported smaller-than-expected quarterly losses,
signaling a revival in travel demand. Both shares fell, with
American down 3.3% and Southwest 0.2%.  urn:newsml:reuters.com:*:nL4N2MF2RH  urn:newsml:reuters.com:*:nL4N2MF1T8
    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.  urn:newsml:reuters.com:*:nL1N2ME282
    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.  urn:newsml:reuters.com:*:nL1N2ME1YW
    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  .DJI  fell 0.89%, the S&P
500  .SPX  lost 0.78% and the Nasdaq Composite  .IXIC  dropped
    Chipmaker Intel Corp  INTC.O  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.  

 (Reporting by Herbert Lash, additional reporting by Shivani
Kumaresan and Shreyashi Sanyal in Bengaluru; Editing by Anil
D'Silva and Richard Chang)
 ((herb.lash@thomsonreuters.com; 1-646-223-6019; Reuters
Messaging: herb.lash.reuters.com@reuters.net))
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