Wall Street headed for a lower open today, with investors downbeat about Microsoft Corp.’s withdrawal of 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.
