Stocks dip after setting records, as wait continues for stimulus

Wall Street capped a solid week of gains on a down note Friday as the wait drags on to see if Congress can reach a deal to send more cash to struggling workers and businesses.

The Standard & Poor’s 500 fell 0.4%, a day after it and other major indexes returned to record heights. The decline ended a winning streak for the benchmark index at three days, but it still notched a 1.3% weekly gain that more than made up its prior week’s loss.

Hope that Congress may be nearing a deal to offer more f inancial support for the economy has helped stocks set more record highs. The S& P clocked its 31st all- time high this year on Thursday. Enthusiasm about vaccines for COVID- 19, which investors hope will get the economy back on the road to normalcy next year, has also fueled traders’ optimism.

Friday’s selling came on a particularly busy day on Wall Street. Index funds were expected to snap up more than $ 80 billion worth of shares in Tesla as they moved to rebalance their holdings for the quarter ahead of the electric car maker’s entry into the S& P 500, effective Monday.

In addition, Friday was also quadruple witching day, Wall Street- speak for the quarterly expiration of stock options and futures contracts, which forces traders to tie up loose ends in contracts they hold, leading to particularly heavy trading volume.

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 gave up 9.11 points, or 0.1%, to 12,755.64. The Russell 2000 dropped 8.06 points, or 0.4%, to 1,969.99.

Some 57% of the companies in the S& P 500 closed lower. Technology stocks, banks and companies that rely on consumer spending accounted for a big slice of the decline. They outweighed gains by household goods makers and materials stocks, among others.

Much of the market’s focus recently has been on Capitol Hill, where momentum has kicked back up for on- and- off- again talks for financial aid for the economy. Negotiations on nearly $ 1 trillion in relief had seemed to be on the brink of success, but a f inal agreement has yet to be secured. The package could include benefits for laid- off workers and cash payments sent to most Americans.

Economists and investors say the need for such action is urgent, as the worsening pandemic tightens its chokehold on the economy. Reports this week showed that more workers are applying for jobless benefits and that retail sales slumped by more last month than economists expected.

The rising coronavirus counts and death tolls are pushing governments around the world to bring back varying degrees of restrictions on businesses, and fear is keeping people and companies away from normal economic activity.

Wall Street’s hope is that Congress can approve big stimulus for the economy, which could carry it through what’s expected to be a dismal winter.

The nation’s f irst COVID- 19 vaccine just began being administered this week, and Vice President Mike Pence got a shot on live television Friday in hopes of assuring Americans that it’s safe. That vaccine was developed by Pfizer and BioNTech. A second vaccine from Moderna and the National Institutes of Health received regulatory authorization for emergency use Friday.

In the bond market, the yield on the 10- year Treasury rose to 0.94% from 0.91% late Thursday.