The Obama administration’s tougher rules on offshore corporate inversions had…

Stricter tax inversion rules punish stocks of firms mulling such moves. The Obama administration’s tougher rules on offshore corporate inversions had an immediate effect Tuesday, pushing down the stock prices of companies considering such moves.But the highly technical changes to the tax code di

Stricter tax inversion rules punish stocks of firms mulling such moves.

The Obama administration’s tougher rules on offshore corporate inversions had an immediate effect Tuesday, pushing down the stock prices of companies considering such moves.

But the highly technical changes to the tax code did not appear to go far enough to derail the controversial deals, in which U.S. companies avoid higher tax rates by buying smaller foreign firms and moving their headquarters abroad.

The measures unveiled Monday by the Treasury Department would make it less profitable for American companies to reincorporate overseas, largely by limiting the ability to shelter foreign earnings from U.S. taxes, analysts said. Still, there probably are enough potential tax savings remaining to pursue those moves.

“It changes the economics of the deals, but it does not seem to rise to the level of where you have made them un-economical,” said Edward Mills, a policy analyst with FBR Capital Markets.

Burger King Worldwide Inc. and Canadian coffee-and-doughnut chain Tim Hortons said Tuesday that they would go ahead with their planned deal, the highest-profile inversion so far.

Miami-based Burger King drew the ire of many consumers and lawmakers when it announced last month that it would acquire Tim Hortons and reincorporate in lower-tax Canada. Burger King is trying to boost its breakfast offerings, a fast-growing segment of the restaurant industry.

“As we’ve said previously, this deal has always been driven by long-term growth and not by tax benefits,” the companies said in a joint statement.

Meanwhile, medical device maker Medtronic Inc., which announced in June that it would acquire European rival Covidien and reincorporate in low-tax Ireland, said Tuesday that it was studying the new rules. The deal has a provision allowing either company to back out if tax laws change.

Shares in those companies and other potential inversion candidates were down Tuesday.

The declines were part of a broader market slide after U.S. airstrikes in Syria and poor economic news from Europe. The Dow Jones industrial average fell 116.81 points, or about 0.7%, to 17,055.87. The S&P 500 index lost 11.52 points, or 0.6%, to 1,982.77, and the Nasdaq composite index was off 19 points, or about 0.4%, to 4508.69.

Burger King shares dropped about 2.7%, Medtronic was off 2.9% and Covidien fell about 2.5%. Tim Hortons was down only slightly.

Shares in British pharmaceutical company AstraZeneca were down about 5%. It has been rumored to be an acquisition target of New York-based Pfizer Inc., which could reduce its taxes after a deal by reincorporating in Britain. Pfizer was off about 0.4%.

“There are still benefits to be had from inverting,” said Ryan Dudley, an international tax expert at accounting and advising firm Friedman. “It’s just a question of whether they now outweigh the costs.”

The calculation will change for each potential transaction, he said.

The 35% corporate tax rate in the U.S. is the highest of any major developed economy, and businesses say that’s what’s driving the recent wave of inversions.

“Rather than piecemeal, onerous actions, the administration should undertake comprehensive tax reform that lowers rates for all businesses and shifts to an internationally competitive system that welcomes investment and produces the economic growth this country needs,” the U.S. Chamber of Commerce said.

Democrats and Republicans agree that a broad overhaul of corporate taxes, including eliminating some loopholes and lowering the overall rate, would be the best solution. But they can’t agree on how to do it.

As more companies seek to reincorporate abroad, President Obama and many congressional Democrats have pushed for legislation narrowly focused on limiting inversions. Key Republicans, however, prefer dealing with the issue through broader tax reform, but legislation has stalled.

With Congress recessed until after the November elections, Treasury Secretary Jacob J. Lew said Monday that he was enacting regulatory changes, effective immediately, to make inversions less economically appealing.

Although the moves will curb some inversions, he conceded that legislation is “the only way to close the door on these transactions entirely.”

Corporate tax experts agreed the regulatory changes fell short of what Congress could do — and even what Treasury could do on its own.

Lew did not restrict so-called earnings stripping, in which a foreign-headquartered company reduces its taxes through loans to its U.S. subsidiary. The interest on the loans is deductible on the subsidiary’s U.S. taxes.

The tactic provides one of the biggest financial benefits of inversion. But short of legislation, Treasury can’t fully limit the practice, analysts said.

As part of the new regulations, Treasury asked for public comments about how to address earnings stripping.

Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, said Treasury was taking a sensible approach in moving slowly.

“One step at a time, start small … see if inversions continue to take place, see how Congress reacts and see what more needs to be done,” he said.

“The question is whether Treasury is still leaving enough tax benefits on the table for U.S. companies to invert,” Rosenthal said. “It’s really hard to say.”