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What happened
Electric car manufacturer shares Tesla (NASDAQ: TSLA) declined again today, marking a second straight day of sharp declines following the automaker’s inclusion in the S&P 500 index on Monday. The stock was down 5.5% but was down 4% as of 11:55 am EST.
Growth stocks are likely to trade lower due to a combination of factors, including a bearish day in the general market, a further pullback following the huge rise in stocks this year, and news that Apple (NASDAQ: AAPL) It may be entering the electric car space.
Image source: Getty Images.
And that
Highlighting the pessimism of the market in general, the S&P 500 fell for the third consecutive trading day today. The market’s downtrend could represent that the street is exercising some caution after market indices rose to all-time highs earlier this month. Tesla stocks, specifically, have had a great year. Even including the recent pullback in stocks, stocks are still up around 650% so far this year. It is not surprising, therefore, that the action takes a breather.
The stock could also trade lower as investors consider rumors that Apple could work on an electric car. The company could aim to start producing its own electric car by 2024, according to Reuters.
Now what
Of course, just because Tesla has been successful in consumer electronics, it doesn’t guarantee success in the capital-intensive auto business. However, Apple currently generates more than $ 70 billion of free cash flow a year, giving it plenty of cash to try to compete directly with Tesla. Still, it’s probably too early to put much weight on the idea of a possible Apple electric vehicle.
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