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

Reuters

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    By Stephen Culp
    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.  urn:newsml:reuters.com:*:nL8N2QG1Y3
    "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."
    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.  urn:newsml:reuters.com:*:nL1N2QF1UC
    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 .  US/   
    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.  urn:newsml:reuters.com:*:nL1N2QF2DB
    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.  urn:newsml:reuters.com:*:nL1N2QG1WA  urn:newsml:reuters.com:*:nL4N2QC2ZR
    Intuit Inc  INTU.O  advanced following the TurboTax maker's
announcement that it would acquire digital marketing company
Mailchimp for $12 billion.  urn:newsml:reuters.com:*:nL4N2QF3KA
    CureVac  CVAC.O  slid after the German biotechnology company
canceled manufacturing deals for its experimental COVID-19
vaccine.  urn:newsml:reuters.com:*:nL8N2QG38U

 (Reporting by Stephen Culp; additional reporting by Krystal Hu
in New York and Ambar Warrick in Bengaluru; Editing by Richard
Chang)
 ((stephen.culp@thomsonreuters.com; 646-223-6076;))

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