US stocks retreat from records as pandemic stimulus talks drag on

House Speaker Nancy Pelosi receives a coronavirus vaccine shot at the Capitol in Washington. PHOTO: NYTIMES

NEW YORK (AFP) - Wall Street stocks declined on Friday (Dec 18), retreating from records, as markets awaited resolution of long-running congressional talks on another relief package for the coronavirus-ravaged US economy.

Congressional leaders have described the negotiations as in the home stretch, but there was still no deal Friday afternoon ahead of a midnight deadline to avert a government shutdown.

The Dow Jones Industrial Average dropped 0.4 per cent to 30,179.05.

The broad-based S&P 500 also fell 0.4 per cent to 3,709.41, while the tech-rich Nasdaq Composite Index slipped 0.1 per cent to 12,755.64.

All three indices had closed at records on Thursday, in part on optimism about a stimulus package.

Republicans and Democrats braced for possibly working through the weekend to conclude a US$900 billion (S$1.2 trillion) deal aimed at providing emergency relief for millions of struggling families and businesses amid signs of a worsening economy and as the country sees record high death tolls from the coronavirus pandemic.

"While there's a lot of optimism about stimulus, it's important not to count on it," said TD Ameritrade's JJ Kinahan in a note Friday morning.

"It's easy to see things going south and the market taking it pretty hard, with so much stimulus premium already built in. Hope for the best, but prepare for the worst, as the saying goes."

FedEx fell 5.7 per cent after reporting that quarterly profits more than doubled to US$1.2 billion behind booming e-commerce volumes.

However, the delivery company declined to provide a forecast, citing uncertainty amid the coronavirus pandemic.

Tesla gained 1.1 per cent ahead of its inclusion in the prestigious S&P 500 index, which will mean it is added to myriad trading vehicles.

Intel plunged 6.3 per cent following a report that Microsoft plans to design its own chips instead of using the Intel technology.

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