us stocks struggled for direction tuesday as investors returned from the threeday christmas weekend with bulls holding out for a seasonal santa claus rally after chinas decision to lift covid quarantine requirements for inbound travelers raising hopes the worlds second largest economy may recover in 2023 last week the dow gained nearly 1 while the sp 500 and nasdaq fell for a third straight week in december so far the sp 500 has dropped roughly 58 while the dow and nasdaq dropped about 4 and 85 respectively these are the biggest monthly declines since september the major averages are headed for their worst annual performance since 2008 see more what to expect for the stock market in 2023 after the biggest decline since the financial crisis friday marked the start of the socalled santa claus rally period  the final five trading days of the calendar year and the first two trading days of the new year that stretch has on average produced gains for stocks but failure to do so is often read as a negative indicator read more how a santa claus rally or lack thereof sets the stage for the stock market in first quarter investors drew some optimism from news that china will drop quarantine requirements for incoming travelers starting in january those travelers will still need to present a negative covid test within 48 hours of travel but will no longer need to routinely isolate five days in a hotel followed by five days at home increased activity in china however could prove to be a mixed blessing when it comes to inflation outside the country said stephen innes managing director of spi asset management in emailed comments the good news is that inflation subsides as china reprises its role as a supplier of lowcost goods globally and supply chain bottlenecks ease still the bad news is as growth accelerates through q1 chinas insatiable demand for raw materials and all things energy will push up prices of those commodities much of to the consternation of the fed and ecb he wrote the us trade deficit in goods narrowed 156 to 833 billion in november according to the commerce departments advanced estimate released tuesday in october the deficit widened to 988 billion from 926 billion in the prior month economists polled by econoday were looking for the deficit to narrow only to a 97 billion in november the us sp corelogic caseshiller 20city house price index fell 05 in october its fourth monthly decline yearoveryear prices rose rose 86 slowing from 104 in the previous month a broader measure of home prices the national index fell a seasonally adjusted 03 in october from september a separate report from the federal housing finance agency showed home prices remaining flat in october down from a 01 gain the prior month and over the last year the fhfa index was up 98 see airlines faced a difficult christmas of storms and sickness says cowen who fared best and worst