# Dow off 100 points as Washington lawmakers race toward COVID fiscal aid deal

The inclusion of Tesla Inc. into the S&P 500 at the conclusion of trading Friday and a rebalancing of portfolios also likely adds some choppiness to markets, analysts said.

What are major benchmarks doing?

• The Dow Jones Industrial Average
  DJIA,
  -0.53%
  fell 102 points, or 0.3%, to 30,200, after touching an intraday record at the open at 30,342.59.

• The S&P 500
  SPX,
  -0.53%
  was down 12 points, or 0.4%, at 3,709. It had hit an intraday record high at 3,726.70.

• The Nasdaq Composite COMP gave up 3 points, or less than 0.1%, to trade at 12,761, after notching an intraday all-time high at 12,809.60.

Stocks rose modestly Thursday, with gains carrying the Dow, S&P 500, Nasdaq Composite and the small-cap Russell 2000
RUT,
+0.69%
to record finishes.

What’s driving the market?

“Today, we see stocks taking a little bit of a breather,” Sahak Manuelian, head of equity trading at Wedbush Securities, told MarketWatch, after a “pretty decent move higher this week.”

Manuelian pointed to outsized trading volumes Friday, likely tied to the expiration of an array of options contracts on the quadruple witching day, but also to the upbeat narrative for stocks remaining pretty much unchanged, with another COVID-19 aid package expected soon.

Senate Majority Leader Mitch McConnell said Friday he was optimistic that an agreement could be reached on a $900 billion package of economic relief that would send checks to households, extend unemployment benefits and provide aid to small businesses.

Democratic and Republican lawmakers also face a midnight Friday deadline to complete a bill funding government operations, which leaves open the possibility of a government shutdown in the midst of a worsening pandemic.

The path of least resistance for equities may remain to the upside on continued expectations that a worsening economic backdrop, as illustrated by a Thursday rise in first-time jobless claims data, will push Congress to complete a deal, analysts said.

“I think it’s a little bit of profit-taking,” said Randy Frederick, managing director of Trading & Derivatives at Schwab Center for Financial Research, of stock indexes falling less than 1% on Friday. “The last thing we heard from Mitch McConnell is that they’re making progress,” he said. “Until we hear that talks have completely broken down, the market will likely continue to hold up reasonably well.”

Meanwhile, a second COVID-19 vaccine is expected to soon be rolled out. An independent advisory committee on Thursday voted 20-0-1 that the benefits of Moderna Inc.’s
MRNA,
-0.88%
COVID-19 vaccine candidate outweigh the risks, a recommendation that sets the stage for a likely Food and Drug Administration authorization. Moderna shares were down 4.7%. Inoculations using the vaccine developed by Pfizer Inc.
PFE,
-1.12%
and BioNTech SE
BNTX,
-1.46%
began earlier this week.

There were 238,189 new COVID-19 cases reported in the U.S. on Thursday, down slightly from 245,033 on Wednesday, according to data provided by the New York Times. Deaths fell from Wednesday’s record of 3,611 to at least 3,293 on Thursday, remaining above the 3,000 level for a third straight day.

The U.S. economic calendar remains light to end the last full trading week of 2020. The current-account deficit, a measure of the nation’s debt to other countries, rose 10.6% in the third quarter largely because of an increase in the trade gap on goods.

A reading on leading economic indicators from the Conference Board for November rose 0.6%.

Which companies are in focus?

• Microsoft Corp.
  MSFT,
  -0.63%
  confirmed that it was breached as part of the massive hack that used a backdoor in SolarWinds software, as part of what the tech giant’s president called “effectively an attack on the United States.” Microsoft shares were down 0.4%.

• Shares of FedEx Corp.
  FDX,
  -4.93%
  fell more than 4%, despite the package-delivery giant late Thursday reporting quarterly sales that topped $20 billion for the first time and earnings that more than doubled.

• Shares of Dow Inc. DOW rose 2.8% to lead gainers in the Dow Jones Industrial Average, after J.P. Morgan turned bullish on the materials science company, as business conditions in the middle of December look “much better” than they did two weeks ago.

• Shares of Steelcase Inc.
  SCS,
  +1.82%
  were up 1.2% after the office-furniture maker said profit and sales fell in the third quarter as it deals with a shift in demand for office products during the COVID-19 pandemic.

• Darden Restaurants Inc.
  DRI,
  -1.73%
  shares fell 1.4% after the restaurant chain reported a better-than-expected profit, but said sales at its Olive Garden restaurants fell more than forecast.

• Shares of Tesla Inc. TSLA were 2.2% higher. The electric car maker joins the S&P 500 after Friday’s close.

What are other markets doing?

• In Asia, the Shanghai Composite
  SHCOMP,
  -0.29%
  fell 0.3%, Hong Kong’s Hang Seng Index
  HSI,
  -0.67%
  lost 0.7% and Japan’s Nikkei 225
  NIK,
  -0.16%
  shed 0.2%.

• In Europe, the Stoxx 600 Europe
  SXXP,
  -0.35%
  fell 0.4%, while London’s FTSE 100 stock index
  UKX,
  -0.33%
  was off 0.3%.

• The 10-year Treasury note yield
  TMUBMUSD10Y,
  0.931%
  rose 1 basis point at 0.93%. Yields and prices move in opposite directions.

• Oil futures edged higher, with the U.S. benchmark
  CL.1,
  +1.08%
  up 1.1% at $48.19 a barrel and on track for a seventh straight weekly rise.

• Gold futures
  GC00,
  -0.07%
  were 1.9% lower near $1,888.60, but on track for a weekly rise.

William Watts contributed reporting