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US STOCKS Wall Street falls as stimulus rally cools, Tesla hits record high

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Dec 18 (Reuters) - U.S. 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 (.SPLRCT), which has led gains this week, was the biggest drag on the overall benchmark index.

Electric-car maker Tesla Inc (TSLA.O), which will become on Monday the most valuable company to be ever added to Wall Street's main benchmark index, traded in heavy volume. read more

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"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."

Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar

The U.S. 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. read more

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 (.DJI) fell 115.51 points, or 0.38%, to 30,187.86, the S&P 500 (.SPX) lost 12.78 points, or 0.34%, to 3,709.7 and the Nasdaq Composite (.IXIC) 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 (FDX.N) fell after it did not give an earnings forecast for 2021, even as its quarterly profit almost doubled.

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Reporting by Karen Pierog in Chicago and Caroline Valetkevitch in New York; Additional reporting by April Joyner in New York, Ambar Warrick and Shreyashi Sanyal in Bengaluru; Editing by Maju Samuel and Shounak Dasgupta

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