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* Traders book profits after trade-fueled December rally
* China factory activity expands for a second straight month
* S&P 500 set for best year since 2013
* Futures off: Dow 0.12%, S&P 0.13%, Nasdaq 0.22%
(Adds comment; updates prices)
By Manas Mishra
Dec 31 (Reuters) - U.S. stock indexes were set for a
lackluster open on Tuesday, as a Wall Street rally fizzled out
in the final days of the decade after growing trade optimism and
a brightening global outlook put the S&P 500 on track for its
best year since 2013.
After logging healthy gains for most of December, the three
major stock indexes posted their worst day in four weeks on
Monday in the absence of major updates on a U.S.-China trade
truce.
The benchmark S&P 500 index closed at its lowest level since
Dec. 20, shrugging off comments by White House's trade adviser
Peter Navarro that the Phase 1 trade deal was likely to be
signed in the next week. "After having a big meal, we have to digest," said Andre
Bakhos, managing director at New Vines Capital LLC in
Bernardsville, New Jersey.
"We have had a strong (run) recently, and the moves
(reflect) a little profit-taking and a little step back before
the next phase."
At 8:50 a.m. ET, Dow e-minis 1YMcv1 were down 33 points,
or 0.12%. S&P 500 e-minis EScv1 were down 4.25 points, or
0.13% and Nasdaq 100 e-minis NQcv1 were down 19.25 points, or
0.22%.
Trading volumes are expected to remain thin this week in
lieu of the New Year's Day holiday on Wednesday.
The S&P 500 is on track for its best December in nine years,
also driven by a loose monetary policy by the Federal Reserve
and relatively upbeat economic indicators.
Latest data from China showed manufacturing activity
expanded for a second straight month in December, partly driven
by seasonal demand. The data aligns with other signs of stabilization in the
Asian economy, including last week's figures that showed profits
at China's industrial firms grew at the fastest pace in eight
months in November.
At home, consumer confidence data for December is expected
at 10 a.m. ET.
After a year that saw many record highs, focus will shift to
the latest batch of companies' earnings reports due January for
indications on the corporate outlook for 2020.
Among individual stocks, U.S-listed shares of Tencent Music
Entertainment TME.N rose 1.1% after a consortium led by the
China-based company agreed to buy a stake in Vivendi's Universal
Music Group.