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Shares ease lower Friday when everyone is waiting for Congress to reach a deal to fight COVID-19


Figure: Five-day chart, S&P 500 index. Source: Yahoo Finance

Stan Choi, Damian J. Trois and Alex Weig

Wall Street ended a solid week of gains on Friday as expectations linger to see if Congress can reach an agreement to send more money to workers and businesses struggling.

The S&P 500 fell 0.4%, a day after it and other major indexes returned to record highs. The decline interrupted the three-day winning streak for the benchmark index, but it still increased its weekly gain by 1.3%, more than offsetting losses from the previous week.

Hopes that Congress may be approaching a deal to offer more financial support to the economy have helped stocks set more record highs. S&P on Thursday reached its 31st all-time high this year. Enthusiasm about the COVID-19 vaccines, which investors hope will return the economy to normal next year, has also fueled optimism among traders.

Friday’s sale took place on a particularly busy day on Wall Street. Index funds were expected to buy back Tesla shares worth more than $ 80 billion when they moved to a rebalance of their holdings for the quarter before the release of the electric car maker in the S&P 500, starting Monday. In addition, Friday was also a four-time witchcraft day, Wall Street talked about the quarterly expiration of stock options and futures contracts, forcing traders to bind contracts they hold, leading to particularly high trading volumes.

“It’s an unusual day because we have Tesla in S&P, and it’s a four-time witchcraft day,” said Andrew Sliman, Morgan Stanley Investment Management’s portfolio manager.

The S&P 500 index fell 13.07 points to 3,709.41. The Dow Jones Industrial Average lost 124.32 points, or 0.4%, to 30,179.05. The Nasdaq composite dropped 9.11 points, or 0.1%, to 12,755.64. Russell 2000 fell 8.06 points, or 0.4%, to 1969.99.

About 57% of companies in the S&P 500 closed below. Shares of technology, banks and consumer spending companies accounted for much of the decline. They outweighed the profits of manufacturers of household goods and stocks of materials, among others.

Promotions to observe the rise of 5G wireless communications

Recently, much market attention has been focused on Capitol Hill, where the momentum for periodic negotiations on financial assistance to the economy has intensified. Negotiations for nearly $ 1 trillion in aid seemed to be on the verge of success, but a final agreement has not yet been reached. The package may include benefits for laid off workers and cash payments that are sent to most Americans.

Economists and investors say the need for such action is urgent because a deteriorating pandemic is dragging on the economy. Reports this week showed that more workers are seeking unemployment benefits and that sales to retailers last month fell more than economists expected.

Rising coronaviruses and deaths are forcing governments around the world to return varying degrees of restrictions to business, and fear keeps people and companies from doing normal economic activities.

Wall Street’s hope is that Congress can approve a big stimulus for the economy that could move it through what is expected in the gloomy winter, before the widespread spread of COVID-19 vaccines helps it start on its own next year.

The country’s first coronavirus vaccine just began to be introduced last week, and Vice President Mike Pence received a live televised photo Friday hoping to reassure Americans that it is safe. This vaccine was developed by Pfizer and BioNTech. The second vaccine from Moderna and the National Institutes of Health may also be on the verge of approval by regulators after a government advisory group approved it on Thursday.

Of course, it will be months before most people can access the vaccine, and the pandemic is likely to do even more damage in the meantime.

In the S&P 500, FedEx fell 5.7% due to one of the sharpest losses in the index, despite the fact that it reported higher revenue and profit for the last quarter than expected by Wall Street. Analysts note that some weaknesses may be caused simply by too high expectations for the company, which became the winner in the sudden “home shopping” economy. FedEx also reported higher costs, including costs to protect workers from coronavirus.

Tesla shares rose 6%. Approximately $ 4.6 trillion in investments directly mimics the index, and these funds together will add tens of billions of Tesla shares, which should become one of the 10 largest stocks in the S&P 500.

Stock markets abroad have been making mostly modest movements.

In Asia, some of the sharpest fluctuations occurred in Hong Kong, where the Hang Seng index fell 0.7% and shares of Semiconductor Manufacturing International Corp. lost by 5.2%. The U.S. Commerce Department said Friday it would restrict exports from a leading Chinese chip maker, claiming it has ties to the military. The company has previously said it has no ties to the Chinese government

This is the latest escalation of trade tensions between the world’s two largest economies.

Other Asian markets were mixed. European markets ended mostly below.

In the bond market, the yield on 10-year Treasury bonds rose to 0.94% from 0.91% at the end of Thursday.


AP Business Writer Joe MacDonald contributed.


Source: AP News

Share price data is provided by IEX Cloud with a 15-minute delay. Chart cost data is provided by TradingView with a 15-minute delay.

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