Stocks lost ground from record highs Monday, giving up virtually all of the Santa Claus rally during a sleepy holiday trading session.
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The term is used on Wall Street to refer to gains made on the last five trading days of the year and the first two of the following year.
|I:DJI||DOW JONES AVERAGES||27123.81||+295.34||+1.10%|
|I:COMP||NASDAQ COMPOSITE INDEX||10975.123391||+33.96||+0.31%|
The losses came despite Peter Navarro, White House assistant for trade and manufacturing policy, telling Fox News that the phase one trade deal between the U.S. and China could be signed within the week. Navarro's comments came after the South China Morning Post reported China's top trade negotiator, Liu He, was leading a delegation that would arrive at the White House on Saturday with the directive of signing the partial agreement.
Elsewhere, pending home sales bounced back from their October decline, growing 1.2 percent month-over-month. The housing market has shown recent signs of heating up heading into 2020 adding to the overall strength of the U.S. economy.
In stock news, Tesla fell after the first Model 3 sedans rolled off its assembly line in China.
Chinese rival Nio soared after an unaudited earnings report showed top and bottom-line results outpaced analyst expectations. The company expects deliveries to surge 66.7 percent quarter-over-quarter in Q4.
Meanwhile, AstraZeneca slipped after receiving Food and Drug Administration approval for its pancreatic cancer drug Lynparza. Merck collaborates on this treatment as well.
|MRK||MERCK & CO. INC.||81.81||+0.14||+0.18%|
Looking at commodities, oil prices were mixed after the U.S. launched airstrikes in Iraq and Syria against an Iran-backed militia group. Brent crude oil, the international benchmark, was up 0.4 percent at $68.44 a barrel and West Texas Intermediate crude oil, the U.S. benchmark, was lower by 0.2 percent at $61.58.
Elsewhere, gold was unchanged at $1,518 an ounce.
U.S. Treasurys fell with the yield on the 10-year note up 2 basis points to 1.89 percent.
In Europe, Germany's DAX lost 0.7 percent, the CAC 40 in Paris shed 0.9 percent and Britain's FTSE edged lower by 0.8 percent.
In Asia, the Shanghai Composite index jumped 1.1 percent, lifted by expectations that a change in rules on lending will reduce funding costs.
On Saturday, the People's Bank of China announced that as of January financial institutions should begin using a new loan-pricing system that will scrap the previous benchmark, which is at 4.35 percent, and use the loan prime rate, which is set at 4.15 percent.
Elsewhere in Asia, Hong Kong's Hang Seng rose 0.3 percent, Tokyo's Nikkei index lost 0.8 percent in its final trading day of the year. Japan's markets will be closed until Jan. 7.
FOX Business' Ken Martin and the Associated Press contributed to this article.