Dow tumbles 321 points on Biden's capital gains tax hike plan
Biden weighs raising capital gains tax for wealthy to 43.4%
U.S. equity markets turned sharply lower Thursday afternoon following a report that the Biden administration is mulling increasing the capital gains tax.
The Dow Jones Industrial Average fell over 321 points, or 0.94%, while the Nasdaq Composite and S&P 500 declined 0.92% and 0.94%, respectively.
|I:DJI||DOW JONES AVERAGES||32781.22||+63.62||+0.19%|
|I:COMP||NASDAQ COMPOSITE INDEX||11985.416593||+59.18||+0.50%|
Biden, according to Bloomberg, is exploring raising the top capital gains tax rate for individuals earning over $1 million to between 39.6% and 43.4%. The increase would help fund Biden's American Families Plan, the details of which are still being ironed out.
In economic data, initial jobless claims fell to a coronavirus-era low of 547,000, better than the 617,000 that analysts were expecting. Additionally, existing-home sales slid to a seven-month low as record prices and tight inventory held back transactions.
GOP SENATORS WARN BIDEN ADMINISTRATION ON DE-BANKING ENERGY COMPANIES
Also impacting trade on Thursday was Biden's virtual conference with 40 world leaders, including Chinese President Xi Jinping, where he pledged to lower U.S. greenhouse gas emissions by up to 52% from 2005 levels before the end of the decade. Automakers were among the groups in focus as Biden gets set to unveil his climate actions.
|F||FORD MOTOR CO.||12.26||+0.21||+1.70%|
|GM||GENERAL MOTORS CO.||36.24||+0.55||+1.53%|
Looking at earnings, AT&T posted a quarterly profit of $7.5 billion, or $1.04 a share, up from 63 cents per share in the same period a year ago.
Meanwhile, Credit Suisse Group said it could raise around $2 billion through the sale of new shares in order to shore up its balance sheet following the Archegos Capital Management debacle, which resulted in a 4.4 billion Swiss franc charge. The bank expects an additional 600 million Swiss franc charge in the current quarter.
|CS||CREDIT SUISSE GROUP AG||0.90||+0.02||+1.88%|
American Airlines Group Inc. loss in the three months through March narrowed to $1.25 billion, from $2.24 billion a year earlier, as it posted a fifth straight quarterly deficit. The airline sees signs of demand recovering during the current three-month period.
|AAL||AMERICAN AIRLINES GROUP INC.||14.51||+0.16||+1.11%|
|LUV||SOUTHWEST AIRLINES CO.||31.85||+0.42||+1.34%|
Rival Southwest Airlines Co. earned $116 million last quarter, boosted by $1 billion in federal money that offset labor costs. The company forecasts its cash burn will slow to between $2 million and $4 million per day in April as more Americans get vaccinated and begin to travel.
|DHI||D.R. HORTON INC.||95.84||+0.09||+0.09%|
Elsewhere, Homebuilder D.R. Horton Inc. reported quarterly profit nearly doubled from a year ago as low mortgage rates and increased demand for housing in the socially distant suburbs amid the pandemic boosted sales. Meanwhile, appliance maker Whirlpool raised its full-year guidance as demand for housing remains strong.
In commodities, West Texas Intermediate crude oil rose 8 cents to $61.43 per barrel and gold dropped $11.10 to $1,781.20 an ounce.
CLICK HERE TO READ MORE FROM FOX BUSINESS
Overseas markets were mostly higher.
European markets rallied across the board with Britain’s FTSE 100 up 0.62%, Germany’s DAX 30 gaining 0.82% and France’s CAC 40 advancing 0.91%.
In Asia, China’s Shanghai Composite index slipped 0.23% while Hong Kong’s Hang Seng index and Japan’s Nikkei 225 climbed 0.47% and 2.38%, respectively.