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 Microsoft had offered $42.3 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.
Investors were 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 54, or 0.41 percent, to 13,006. Standard & Poor's 500 index futures fell 7.40, or 0.52 percent, to 1,408.40, and Nasdaq composite futures fell 9.50, or 0.48 percent, to 1,980.75.
On Friday, the stock market finished mixed, 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.
Light, sweet crude oil futures on Monday rose 31 cents to $116.63 a barrel in electronic trading on the New York Mercantile Exchange. 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.
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 Gold prices also climbed Monday, while the dollar traded mixed against other major currencies.
In other corporate news, The Wall Street Journal reported Deutsche Telekom AG is considering a bid to buy Sprint Nextel Corp., citing people familiar with the discussions.
Overseas, Japan's and Great Britain's stock markets were closed. By midday trading, Germany's DAX index rose 0.04 percent, and France's CAC-40 fell 0.20 percent.
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On the Net:
New York Stock Exchange: http://www.nyse.com/
Nasdaq Stock Market: http://www.nasdaq.com/
[Associated Press; By MADLEN READ]
Copyright 2008 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or
redistributed.
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