US STOCKS-Wall Street dips as stimulus rally cools, Tesla hits record high

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* 'Quadruple witching' to push up volumes, volatility
* All three major indexes set for weekly gains
* Tesla rises in high-volume trade
* Indexes down: Dow 0.7%, S&P 0.6%, Nasdaq 0.2%

(Updates comment, prices)
By Ambar Warrick and Shreyashi Sanyal
Dec 18 (Reuters) - Wall Street retreated from record highs
on Friday as a coronavirus stimulus deal remained in focus ahead
of a weekend deadline, while Tesla shares hit a lifetime high in
anticipation of their addition to the S&P 500 next week.
All the three major indexes hit a record high at the open,
before retreating. Technology shares .SPLRCT , which have led
gains this week, were the biggest drag on the S&P 500, followed
by financials .SPSY and consumer discretionary .SPLRCD
sectors.
Still, all three major indexes were set for weekly gains,
with the Nasdaq .IXIC poised to outperform its peers with a
2.8% gain.
Electric-car maker Tesla Inc TSLA.O rose 3.8%, with
massive trading volumes, as it is set to become the most
valuable company to be ever added to Wall Street's main
benchmark index. However, some market participants were concerned by the
disruption that is expected from a company of such size being
added to the index.
"The reason why it has been kept out of the S&P so far is
due to its volatility, it has had quarters when it would swing
from a large profit to a loss. Typically these indexes want
their constituents to have some consistency in profitability,"
said Randy Frederick, vice president of trading and derivatives
for Charles Schwab in Austin, Texas.
At 11:44 a.m. ET the Dow Jones Industrial Average .DJI
fell 200.64 points, or 0.66%, to 30,102.73, the S&P 500 .SPX
lost 23.11 points, or 0.62%, to 3,699.37, and the Nasdaq
Composite .IXIC lost 29.02 points, or 0.23%, to 12,735.72.
Markets are likely to see increased trading volumes in the
day due to the expiration of stock index futures, stock index
options, stock options and single stock futures at the end of
trade, also known as quadruple witching.
Bipartisan lawmakers said on Thursday the COVID-19
pandemic's worsening toll meant that failure to agree on new
stimulus was no longer an option.
Dismal retail sales data and unemployment claims through the
week were also seen as furthering the case for more aid.
"The market is a little bit skeptical because the stopwatch
is on and time is running out, people want to see the deal
actually inked," said Thomas Hayes, managing member at Great
Hill Capital in New York.
The prospect of continued monetary and fiscal stimulus has
helped stocks look past the economic impact of the pandemic, and
set them up for strong annual gains, despite a rocky start to
the year.
Microsoft Corp MSFT.O shed 0.4% after saying it found
malicious software in its systems related to a massive hacking
campaign disclosed by U.S. officials this week. FedEx Corp FDX.N fell 5.5% after it did not give an
earnings forecast for 2021, even as its quarterly profit almost
doubled. Rival United Parcel Service Inc's UPS.N shares also
declined 1.4%.
Declining issues outnumbered advancers for a 1.3-to-1 ratio
on the NYSE. Advancing issues outnumbered decliners for a
1.2-to-1 ratio on the Nasdaq.
The S&P 500 posted 31 new 52-week highs and no new low,
while the Nasdaq recorded 360 new highs and 12 new lows.