Shares of electric-car maker Tesla (NASDAQ:TSLA) are down again today, marking a second day in a row of sharp declines following the automaker's inclusion in the S&P 500 index on Monday. The stock declined as much as 5.5% but was down 4% as of 11:55 a.m. EST.
Shares of the growth stock are likely trading lower due to a combination of factors, including a bearish day in the overall market, a further pullback following the stock's enormous run-up this year, and news that Apple (NASDAQ:AAPL) may be getting into the electric-car space.
Highlighting broader-market pessimism, the S&P 500 fell for a third market day in a row today. Market bearishness could represent the Street exercising some caution after market indexes rose to all-time highs earlier this month. Tesla stock, specifically, has had a great year. Even including the stock's recent pullback, shares are still up about 650% year to date. It's not surprising, therefore, to see the stock take a breather.
The stock could also be trading lower as investors consider rumors of Apple potentially working on an electric car. The company may be aiming to start producing its own electric car by 2024, according to Reuters.
Of course, just because Apple has succeeded in consumer electronic devices, it does not guarantee success in the capital-intensive auto business. Nevertheless, Apple currently generates over $70 billion of free cash flow annually, giving it plenty of cash to make an attempt to compete directly with Tesla. Still, it's likely too early to give much weight to the idea of a potential electric vehicle from Apple.