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Investors who sell underperforming U.S. stocks to lock in tax benefits before year-end may be adding to recent pressure on equities while sowing the seeds of a January rebound in some corners of the market.

With the S&P 500 down about 16% year-to-date and many individual stocks nursing even sharper losses, tax-loss harvesting – or investors selling assets with a loss in order to cancel out the income taxes they owe on realized gains elsewhere in their portfolios – may be a stronger than usual headwind to markets this year.

Published by David Randall in Reuters.