Wall Street closes lower as stimulus rally cools

Wall Street closes lower as stimulus rally cools, Tesla volume jumps

All three major indexes hit record highs at the opening before retreating

 Representative Image. Credit: AFP Photo

US stocks ended lower on Friday, pulled down by uncertainty around a coronavirus stimulus deal, while Tesla shares jumped in heavy trading 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.

Trading was heavy and volatile in shares of 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.

The stock was last up 6 per cent and hit a record high. Turnover in Tesla shares topped $120 billion shortly after 4 p.m. EST, with volume exceeding 200 million as the stock traded after hours, according to Refinitiv data.

"Tesla is sort of a New Age cult stock. There are people who love the product and who love the stock," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York, New York.

Investors could see further gains in the stock on Monday, but possibly profit-taking after that, he said, adding, "a lot of people bought when the announcement" of the inclusion in the S&P 500 came out.

Market trading volumes were high 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."

Volume on US exchanges was 15.8 billion shares, compared with the 11.6 billion average for the full session over the last 20 trading days.

The US Congress on Friday risked blowing through a midnight deadline to keep the government open and address the coronavirus crisis, as a partisan fight over federal lending rules caused a fresh delay on a $900 billion COVID-19 relief bill.

The Dow Jones Industrial Average fell 124.32 points, or 0.41 per cent, to 30,179.05, the S&P 500 lost 13.07 points, or 0.35 per cent, to 3,709.41 and the Nasdaq Composite dropped 9.11 points, or 0.07 per cent, to 12,755.64.

For the week, the S&P 500 was up 1.3 per cent, the Dow was up 0.4 per cent and the Nasdaq gained 3.1 per cent.

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," said Lindsey Bell, chief investment strategist at Ally Invest, in Charlotte, North Carolina.

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 5.7 per cent after it did not give an earnings forecast for 2021, even as its quarterly profit almost doubled.

Declining issues outnumbered advancing ones on the NYSE by a 1.41-to-1 ratio; on Nasdaq, a 1.26-to-1 ratio favored decliners.

The S&P 500 posted 40 new 52-week highs and no new lows; the Nasdaq Composite recorded 302 new highs and 9 new lows.

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