(RTTNews) – After turning in a lackluster performance for much of the morning, stocks came under pressure in afternoon trading on Thursday. The major averages all pulled back sharply, offsetting the strong gains posted in the previous session.
The major averages climbed off their worst levels but still closed firmly in negative territory. The Dow tumbled 321.41 points or 0.9 percent to 33,815.90, the Nasdaq slumped 131.81 points or 0.9 percent to 13,818.41 and the S&P 500 slid 38.44 points or 0.9 percent to 4,134.98.
The afternoon sell-off came following reports President Joe Biden plans to propose nearly doubling the capital gains tax rate for wealthy individuals to fund spending on child care and education.
According to media outlets including Bloomberg News and the New York Times, Biden’s so-called “American Families Plan” would raise the capital gains rate for those earning $1 million or more to 39.6 percent from 20 percent.
The report raised concerns the Biden administration’s tax policies could halt the nearly persistent advance by the markets throughout the past year.
Earlier in the day, traders were reacting to a Labor Department report unexpectedly showing a continued decline in initial jobless claims in the week ended April 17.
The report said initial jobless claims fell to 547,000, a decrease of 39,000 from the previous week’s revised level of 586,000.
The continued drop came as a surprise to economists, who had expected jobless claims to rebound to 617,000 from the 576,000 originally reported for the previous month.
With the unexpected decrease, jobless claims slid to their lowest level since hitting 256,000 in the week ended March 14, 2020.
Meanwhile, the National Association of Realtors released a report showing another steep drop in U.S. existing home sales in the month of March.
NAR said existing home sales tumbled by 3.7 percent to an annual rate of 6.01 million in March after plunging by 6.3 percent to a revised rate of 6.24 million in February.
Economists had expected existing home sales to dip by 0.5 percent to a rate of 6.19 million from the 6.22 million originally reported for