Asia-Pacific markets fell in light trading on Tuesday, with some major indexes closed for the New Year’s holiday and others closing early.

The Shanghai Composite

SHCOMP, -0.16%

  slipped 0.1% while the Shenzhen Composite

399106, +0.11%

 rose 0.2% after data showed China’s factory activity continued to expand for a second straight month in December, following six months of contraction.

Hong Kong’s Hang Seng Index

HSI, -0.46%

  fell 0.5% ahead of an early close. Australia’s S&P/ASX 200

XJO, -1.78%

  was also set to close early, posting steeper losses. Japan’s Nikkei and South Korea’s Kospi were closed.

Among individual stocks, AAC

2018, +1.80%

  and China Resource Land

1109, +0.91%

   gained in Hong Kong, while Tencent

700, -1.98%

  and Alibaba

9988, -1.61%

  fell. Beach Energy

BPT, -1.95%

 , BHP

BHP, -1.27%

  and Commonwealth Bank

CBA, -1.48%

  slid in Australia as a heat wave and wildfires continued to grip the country.

On Monday, U.S. stock indexes logged their worst declines in about four weeks, despite optimism over an initial trade pact with China that may be signed soon.

U.S. markets — with the exception of the bond market — will be open for a full day of trading Tuesday, and most major global markets will close Wednesday for New Year’s Day.

In U.S. trading, the benchmark S&P 500 has risen five straight weeks, notching multiple all-time highs along the way. It’s on track to end December with its fourth consecutive monthly gain.

The S&P 500

SPX, -0.58%

  dropped 0.6% to 3,221.29. The Dow Jones Industrial Average

DJIA, -0.64%

  fell 0.6% to 28,462.14. The Nasdaq composite

COMP, -0.67%

  lost 0.7%, to 8,945.99.

“There could be a few big institutions out there that are taking some profits,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “Big players can have a bigger influence on the market when the volumes are low.”

Despite the downbeat start to the holiday shortened week, the S&P 500 is on pace to finish the year 28.5% higher, which would make it the strongest annual gain for the market since 2013.

A truce in the 17-month U.S.-China trade war and positive signs for the economy have helped keep investors in a buying mood. Fears about a possible recession have also faded since the summer after the Federal Reserve cut interest rates three times. The central bank appears set to keep them low for the near future.

Still, as the market prepares to close out a strong year of gains, uncertainty remains over the final details of a “Phase 1” trade deal between Washington and Beijing, which U.S. officials say will be signed in early January. Details of the agreement have not been disclosed, and it’s unclear how much impact it will have if the two sides are unable to resolve their remaining differences.

A couple of potentially market-moving economic reports are scheduled for release this week.

Investors will get to mull over new data on U.S. consumer confidence and home prices Tuesday, and the latest snapshot of manufacturing on Friday. Meanwhile, the minutes of the Federal Reserve’s latest interest rate policy meeting are also due out on Friday.

Frederick said the latest data on manufacturing is probably the one that investors should pay attention to the most.

“While (manufacturing) only represents about 12% of the economy, it tends to be much more of a leading indicator versus the services sector,” he said. “And it’s been one of the things that’s been causing those out there who think we still might be seeing a recession at some point soon to worry.”

Benchmark U.S. crude oil

CLG20, -0.16%

  lost 6 cents to $61.62 per barrel in electronic trading on the New York Mercantile Exchange. Coming off a four-week winning streak, it slipped 4 cents to $61.68 per barrel on Monday. Brent crude

BRNG20, +0.35%

 , the international standard, gave up 4 cents to $66.63 per barrel.

The dollar

USDJPY, -0.17%

  fell to 108.67 Japanese yen from 108.89 yen on Monday.

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