Wall Street drops as stimulus rally cools

Wall Street drops as stimulus rally cools, Tesla at record high

All the three major indexes hit a record high at the open, before retreating

Representative image/Credit: AFP Photo

Wall Street retreated from record highs on Friday as a coronavirus stimulus deal remained in focus ahead of a weekend deadline, while Tesla shares hit their highest in anticipation of their addition to the S&P 500 next week.

All the three major indexes hit a record high at the open, before retreating.

Markets are likely to see increased trading volumes in the day 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.

Electric-car maker Tesla Inc rose 2% to a record high, seeing massive trading volumes as it becomes the most valuable company ever added to Wall Street's main benchmark index.

"The market is a little bit skeptical because the stopwatch is on and time is running out, people want to see the deal actually inked," said Thomas Hayes, managing member at Great Hill Capital in New York.

Retail stocks such as Kohl's Corp and Macy's Inc rose more than 3% each after the National Retail Federation flagged the possibility of high pre-Christmas demand.

"The stimulus getting approved would be bullish for the retail sector ... the vast majority of that money will go right into holiday shopping, on expectations of receiving stimulus checks even if they come after Christmas," Hayes added.

At 9:58 a.m. ET, the Dow Jones Industrial Average was down 79.83 points, or 0.26%, at 30,223.54, the S&P 500 was down 10.86 points, or 0.29%, at 3,711.62. The Nasdaq Composite was down 9.02 points, or 0.07%, at 12,755.73.

Bipartisan lawmakers said on Thursday the COVID-19 pandemic's worsening toll meant that failure to agree on new stimulus was no longer an option.

Dismal retail sales data and unemployment claims through the week were also seen as furthering the case for more stimulus.

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.

Wall Street indexes were set to end the week higher, with the Nasdaq set to outperform its peers with a more than 3% gain on sustained buying into technology stocks.

Microsoft Corp shed 0.6% after the tech major said it found malicious software in its systems related to a massive hacking campaign disclosed by U.S. officials this week.

FedEx Corp fell 3.4% after the package delivery company declined to give an earnings forecast for 2021, even as its quarterly profit almost doubled.

Rival United Parcel Service Inc's shares also declined 1.1%.

Advancing issues outnumbered decliners for a 1.02-to-1 ratio on the NYSE and a 1.27-to-1 ratio on the Nasdaq.

The S&P index recorded 27 new 52-week highs and no new low, while the Nasdaq recorded 185 new highs and three new lows.

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