* ‘Quadruple witching’ to push up volumes, volatility
* All three major indexes set for weekly gains
* Tesla rises in high-volume trade
* Indexes down: Dow 0.7%, S&P 0.6%, 0.2% (Updates comment, prices)
By Ambar Warrick and Shreyashi Sanyal
Dec 18 (Reuters) – 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 a lifetime high 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. Technology shares , which have led gains this week, were the biggest drag on the S&P 500, followed by financials and consumer discretionary sectors.
Still, all three major indexes were set for weekly gains, with the Nasdaq poised to outperform its peers with a 2.8% gain.
Electric-car maker Tesla Inc rose 3.8%, with massive trading volumes, as it is set to become the most valuable company to be ever added to Wall Street’s main benchmark index. some market participants were concerned by the disruption that is expected from a company of such size being added to the index.
“The reason why it has been kept out of the S&P so far is due to its volatility, it has had quarters when it would swing from a large profit to a loss. Typically these indexes want their constituents to have some consistency in profitability,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab (NYSE:) in Austin, Texas.
At 11:44 a.m. ET the Dow Jones Industrial Average fell 200.64 points, or 0.66%, to 30,102.73, the S&P 500 lost 23.11 points, or 0.62%, to 3,699.37, and the Nasdaq Composite lost 29.02 points, or 0.23%, to 12,735.72.
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.
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 aid.
“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.
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.
Microsoft Corp shed 0.4% after saying it found malicious software in its systems related to a massive hacking campaign disclosed by U.S. officials this week. Corp FDX.N fell 5.5% after it did not give an earnings forecast for 2021, even as its quarterly profit almost doubled. United Parcel Service Inc (NYSE:)’s UPS.N shares also declined 1.4%.
Declining issues outnumbered advancers for a 1.3-to-1 ratio on the NYSE. Advancing issues outnumbered decliners for a 1.2-to-1 ratio on the Nasdaq.
The S&P 500 posted 31 new 52-week highs and no new low, while the Nasdaq recorded 360 new highs and 12 new lows.