September 23, 2021, 19:12

    U.S. stocks close lower on worries over recovery, corporate tax hikes

    U.S. stocks close lower on worries over recovery, corporate tax hikes

    NEW YORK, Sept 14 (Reuters) – Wall Street lost ground on Tuesday as economic uncertainties and the increasing likelihood of a corporate tax rate hike dampened investor sentiment and offset signs of easing inflation.

    Optimism faded throughout the session, reversing an initial rally following the Labor Department's consumer price index report. All three major U.S. stock indexes ended in negative territory in a reminder that September is a historically rough month for stocks.

    So far this month the S&P 500 is down about 1.8% even as the benchmark index has gained over 18% since the beginning of the year.

    "There is a possibility that the market is simply ready to go through an overdue correction," said Sam Stovall, chief investment strategist at CFRA Research in New York. "From a seasonality perspective, September tends to be the window dressing period for fund managers."

    The advent of the highly contagious Delta COVID variant has driven an increase in bearish sentiment regarding the recovery from the global health crisis, and many now expect a substantial correction in stock markets by the end of the year. read more

    "We're still in a corrective mode that people have been calling for months," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. "Economic data points have been missing estimates, and that has coincided with the rise in the Delta variant."

    American flags hang from the facade of the New York Stock Exchange (NYSE) building after the start of Thursday's trading session in Manhattan in New York City, New York, U.S., January 28, 2021. REUTERS/Mike Segar/File Photo

    The Consumer Price Index report delivered a lower-than-consensus August reading, a deceleration that supports Federal Reserve Chairman Jerome Powell's assertion that spiking inflation is transitory and calms market fears that the central bank will begin tightening monetary policy sooner than expected. read more

    U.S. Treasury yields dropped on the data, which pressured financial stocks (.SPSY), and investor favor pivoted back to growth (.IGX) at the expense of value (.IVX).

    The long expected corporate tax hikes, to 26.5% from 21% if Democrats prevail, are coming nearer to fruition with U.S. President Joe Biden's $3.5 trillion budget package inching closer to passage. read more

    Unofficially, the Dow Jones Industrial Average (.DJI) fell 284.29 points, or 0.82%, to 34,585.34, the S&P 500 (.SPX) lost 25.14 points, or 0.56%, to 4,443.59 and the Nasdaq Composite (.IXIC) dropped 64.77 points, or 0.43%, to 15,040.81.

    Shares of Apple Inc (AAPL.O) dropped after the company unveiled its iPhone 13 and added features to its iPad and Apple Watch gadgets in its biggest product launch event of the year as it faces increased scrutiny in the courts over its business practices. read more

    Intuit Inc (INTU.O) advanced following the TurboTax maker's announcement that it would acquire digital marketing company Mailchimp for $12 billion. read more

    CureVac slid after the German biotechnology company canceled manufacturing deals for its experimental COVID-19 vaccine. read more

    Reporting by Stephen Culp; additional reporting by Krystal Hu in New York and Ambar Warrick in Bengaluru; Editing by Richard Chang


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