NEW YORK (AP) - Wall Street headed for a lower open Monday, with investors
downbeat about Microsoft Corp. withdrawael of a its bid for Yahoo Inc. over the
weekend.
Microsoft had offered $43.7 billion to buy Yahoo Inc., but scrapped the bid
late Saturday after the software maker and the Internet provider could not agree
on a sale price.
The failed deal came as a disappointment to Wall Street, as
merger-and-acquisition activity tends to boost shareholder value, and also
signals to the broader market that corporate America is optimistic about the
future. Yahoo Inc. shares plummeted 22 percent in pre-market trading.
Investors were also awaiting a key reading on the U.S. service sector. The
Institute for Supply Management is expected to say its April index of
nonmanufacturing activity came in at 49.3, indicating a small contraction, after
March's similar reading of 49.6, according to economists surveyed by Thomson
Financial/IFR.
Dow Jones industrial average futures fell 45, or 0.34 percent, to 13,015.
Standard & Poor's 500 index futures fell 5.80, or 0.41 percent, to 1,410.00, and
Nasdaq composite futures fell 6.25, or 0.31 percent, to 1,984.00.
Helping to offset some of investors' disappointment over the abandoned Yahoo
deal was a report from the Wall Street Journal, which said that Deutsche Telekom
AG is considering a bid to buy Sprint Nextel Corp., according to people familiar
with the discussions. Sprint shares rose 5.2 percent in pre-market trading.
Bond prices moved modestly higher. The yield on the benchmark 10-year
Treasury note, which moves opposite its price, fell to 3.87 percent from 3.86
percent late Friday.
Overall, first-quarter earnings reports and economic data have been coming
in weak, but not as poor as many on Wall Street had braced for. Optimism for an
economic rebound later in the year has lifted the Dow back above the 13,000
mark.
Investors have lingering concerns, however -- not only is the housing market
still extremely weak, but commodities prices remain near record levels,
threatening consumers' discretionary spending and their ability to pay off debt.
The stock market finished mixed Friday, with Wall Street cheered by a
stronger-than-expected report on the job market in April, but anxious about a
surprising quarterly loss from Sun Microsystems Inc. and a rebound in oil
prices.
On Monday, crude oil futures for June delivery rose 67 cents to $116.99 a
barrel in electronic trading on the New York Mercantile Exchange, boosted by
news of an attack on a Nigerian oil facility. Crude oil had spiked more than $3
a barrel on Friday, and some analysts are concerned the commodity will surge
back above its record near the $120-a-barrel level.
Gold prices also climbed Monday, while the dollar traded mixed against other
major currencies.
Overseas, Japan's and Great Britain's markets were closed. By afternoon
trading, Germany's DAX index fell 0.02 percent, and France's CAC-40 fell 0.23
percent.
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