Stock indexes are slightly lower today as the market struggles for direction in thin year-end trading. Higher bond yields are negative for stocks as the 10-year T-note yield is up +2 bp to 4.13%. Losses are limited by a rally in European stocks. Tuesday marks the last trading day of the year for Germany, Japan, and South Korea.

US economic news today was better than expected. The Oct S&P Case-Shiller home price index rose +0.3% m/m and +1.3% y/y, exceeding expectations. The Dec MNI Chicago PMI also rose above expectations. Seasonal factors are bullish for stocks with the S&P 500 rising 75% of the time in the last two weeks of December.

Market attention this week focuses on US economic news. The minutes of the December 9-10 FOMC meeting will be released today. Initial weekly unemployment claims are expected to increase on Wednesday. On Friday, the Dec S&P manufacturing PMI is expected to remain unchanged. The odds for a -25 bp rate cut at the next FOMC meeting are 16%.

Overseas stock markets are mixed today. The Euro Stoxx 50 index climbed to a 1.5-month high. China’s Shanghai Composite closed unchanged. Japan’s Nikkei Stock 225 fell to a 1-week low. In the interest rates market, the 10-year T-note yield is up to 4.132%. European government bond yields are mixed today. Spain’s Dec CPI rose as expected.

Pharmaceutical companies are under pressure today in the stock market. Energy companies are climbing as WTI crude oil gains. Citigroup expects a loss on the sale of its Russia business. Ultragenyx Pharmaceutical is rebounding after a plunge. Molina Healthcare leads gainers in the S&P 500. Boeing is up after securing a US Air Force contract. Earnings reports are expected today from various companies.

Read more at Yahoo Finance: Stocks Slip as Bond Yields Rise