NEW YORK, April 22 Reuters U.S. stocks dived on Thursday on reports President Joe Biden planned to almost double the capital gains tax, news analysts said provided an excuse to take profits in a directionless market ahead of big techs earnings next week.
The three main indexes on Wall Street also fell on reports that Biden planned to raise income taxes on the wealthy, a proposal some said would be hard to pass in Congress.
If it had a chance of passing, wed be down 2,000 points, said Thomas Hayes, chairman and managing member at hedge fund Great Hill Capital LLC.
Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago, said when a proposal is floated about raising taxes or capital gains, everybody gets excited, sells first and asks questions later.
It is more of a shortterm, kneejerk reaction, he said.
Biden will propose raising the marginal income tax rate to 39.6 from 37 and nearly double capital gains taxes to 39.6 for people earning more than 1 million, sources told Reuters.
The proposal targets about 1 trillion for child care, universal prekindergarten education and paid leave for workers, the sources said.
Markets have been listless after the Dow and SP 500 scaled alltime peaks last week as investors await guidance from Microsoft Corp, Google parent Alphabet Inc and Facebook Inc when they report earnings next week.
Until we get out of this information vacuum the market is going to be generally directionless, he said. All that really…