Tesla shares dive after S&P 500 denial
U.S. stocks again on Tuesday were pigeon, technology stocks, the market’s top gainers this year, boosting the worst weekly run in more than five months.
Shares of electric car company Tesla fell 21%, leaving investors unprotected as the company was excluded from the S&P 500. Tesla’s decline came only after General Motors said it would invest. 2 billion in electric-truck maker Nicola.
Many were expecting Tesla to join the stock market index, which has been meticulously observed this year. But still S&P Dow Jones codes announced On Friday it was replaced by online retailer Etsy, automated test equipment manufacturer Deratin and medical technology company Cataland in the benchmark lineup.
On Tuesday, the Nasdaq fell 4.1% or 465 points, the S&P 500 lost 2.8% or 95 points, and the Dow fell 632 points or 2.3%. Friday saw steep losses in key technology stocks Five-week winning streak for Apple, Amazon and others.
Some Wall Street analysts have argued that technology’s relentless rally in 2020 has pushed stocks to an unsustainable height, with the Nasdaq rising 70% since last week’s retreat.
“The question that comes up here is whether or not the foam cut from the market should shake the tree to make it more rechargeable for another need,” said Peter Bouquar, chief investment officer at the Flickli Advisory Board, in an email comment. “No one is questioning the basics of technology right now, to highlight the industry, but the price to pay for that development.”
By 2020, Tesla’s shares will have risen more than 300%. This makes the car company the second best performer on the Nasdaq 100 in 2020 after Zoom Video Communications, a virtual conferencing software. Tesla’s market rating is now higher than that of major automakers.
But shares of Tesla have moved south over the past week, with the company claiming to have sold $ 5 billion worth of shares and its second-largest shareholder to cut its investment.
Other hot Nasdaq stocks also fell, with Zoom down 5.1% and Apple down nearly 7%.
GM partnership with Nicola
In contrast, Nicola’s shares rose more than 40%, and GM rose 7.9%, announcing that it would take an 11% stake in the startup. Its hydrogen fuel cell builds an electric pickup truck, Badger.
“This news confirms a big shot and credibility for Nicola, whose badger production is set to launch at the end of 2022, but its hydrogen fuel cell aspirations and half-truck vision are moving forward,” Wetbush Securities analysts wrote in a note to customers on Tuesday.
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