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

Reuters

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    * August CPI comes in cooler than expected
    * Apple heaviest drag on S&P after product launch event
    * Drop in Treasury yields pressures financials
    * Indexes down: Dow 0.84%, S&P 500 0.57%, Nasdaq 0.45%

 (Updates with closing prices)
    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
prompted a broad sell-off despite 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 nearly 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 CPI 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
    The Dow Jones Industrial Average  .DJI  fell 292.06 points,
or 0.84%, to 34,577.57; the S&P 500  .SPX  lost 25.68 points, or
0.57%, at 4,443.05; and the Nasdaq Composite  .IXIC  dropped
67.82 points, or 0.45%, to 15,037.76.
    All 11 major sectors in the S&P 500 ended the session red,
with energy  .SPNY  and financials  .SPSY  suffering the largest
percentage drops.
    Apple Inc  AAPL.O  unveiled its iPhone 13 and added new
features to its iPad and Apple Watch gadgets in its biggest
product launch event of the year as the company faces increased
scrutiny in the courts over its business practices. Its shares
closed down 1.0% and were the heaviest drag on the S&P 500 and
the Nasdaq.  urn:newsml:reuters.com:*:nL1N2QG1WA  urn:newsml:reuters.com:*:nL4N2QC2ZR
    Intuit Inc  INTU.O  gained 1.9% 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 8.0% after the German biotechnology
company canceled manufacturing deals for its experimental
COVID-19 vaccine.  urn:newsml:reuters.com:*:nL8N2QG38U
    Declining issues outnumbered advancing ones on the NYSE by a
2.25-to-1 ratio; on Nasdaq, a 2.40-to-1 ratio favored decliners.
    The S&P 500 posted two new 52-week highs and two new lows;
the Nasdaq Composite recorded 50 new highs and 107 new lows.  
    Volume on U.S. exchanges was 10.07 billion shares, compared
with the 9.38 billion average over the last 20 trading days.    


 (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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