Wall Street falls as stimulus rally cools, Tesla hits record high
- All three major indexes hit record highs at the opening before retreating. The S&P 500 technology index, which has led gains this week.
- Electric-car maker Tesla Inc, which will become on Monday the most valuable company to be ever added to Wall Street's main benchmark index, traded in heavy volume.
US stocks ended lower on Friday, pulled down by uncertainty around a coronavirus stimulus deal, while Tesla shares hit a lifetime high in anticipation of their addition to the S&P 500 next week.
All three major indexes hit record highs at the opening before retreating. The S&P 500 technology index, which has led gains this week, was the biggest drag on the overall benchmark index.
Electric-car maker Tesla Inc, which will become on Monday the most valuable company to be ever added to Wall Street's main benchmark index, traded in heavy volume.
"You're already seeing significant levels of volume in Tesla stock today, moving a lot higher as a lot of these different ETFs and mutual funds position ahead of the change to get us close to the price as possible for tracking error purposes," said Lindsey Bell, chief investment strategist at Ally Invest, in Charlotte, North Carolina.
Investors are seeing increased trading volumes also due to the expiration of stock index futures, stock index options, stock options and single stock futures at the end of trade, also known as "quadruple witching." The US Congress looked increasingly unlikely on Friday to meet a deadline to agree on $900 billion in fresh COVID-19 aid and instead may pass a third stopgap spending bill to keep the government from shutting down at midnight.
Recent weak economic data has increased pressure on lawmakers to reach a deal.
"Investors definitely want to see something come through or like to see something come through on the stimulus front sooner rather than later as COVID cases continue to rise and economic data has shown that it is beginning to deteriorate," Bell said.
Unofficially, the Dow Jones Industrial Average fell 115.51 points, or 0.38%, to 30,187.86, the S&P 500 lost 12.78 points, or 0.34%, to 3,709.7 and the Nasdaq Composite dropped 9.11 points, or 0.07%, to 12,755.64.
The prospect of continued monetary and fiscal stimulus has helped stocks look past the economic impact of the pandemic, and set them up for strong annual gains, despite a rocky start to the year.
FedEx Corp fell after it did not give an earnings forecast for 2021, even as its quarterly profit almost doubled.
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