Market report: Acquisitions continue, but stocks slip

NEW YORK – Wall Street fell for the first time in four sessions on Monday as concerns about the technology and energy sectors overshadowed some $81 billion in takeover activity.

Stocks spent most of the day in positive territory as investment bankers squeezed in more deals before year end and helped keep a floor under share prices for most of the day.

Among the bigger deals announced, pharmacy benefits manager Express Scripts Inc. said it is offering to buy rival Caremark RX for about $26 billion. Realogy Corp., which owns the Coldwell Banker real estate franchise, said it has agreed to be acquired by private equity firm Apollo Group for about $6.65 billion.

“What is driving mergers and acquisitions is strong stock prices. That gives companies the currency to go out and do deals,” said Steven Bernard, director of M&A market analysis at investment bank Robert W. Baird. “This still means there are a lot of deals out there, and we expect the strength we’re seeing will continue into 2007.”

An unprecedented amount of acquisition activity has occurred in 2006. With only 13 days left in the year, announced deals have amounted to almost $4 trillion worldwide, beating out $3.33 trillion set in 2000, according to market analysis company Dealogic.

The shopping spree by companies and private equity firms Monday was not enough to stave off losses during the session, however. Investors sold off shares of ExxonMobil Corp. due to a sharp drop in crude and also questioned the sustainability of profits at Google Inc.

The Dow Jones industrial average fell 4.25, or 0.03 percent, to 12,441.27. For most of the session, the Dow traded above Friday’s record close of 12,445.52.

Broader stock indicators were lower. The S&P fell 4.61, or 0.32 percent, to 1,422.48, and the Nasdaq composite declined 21.63, or 0.88 percent, to 2,435.57.

Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.59 percent from 4.60 percent late Friday.

The dollar was mixed against other major currencies, while gold prices fell.

Oil prices fell after rallying last week when it was announced inventories were lower than expected, which could increase the price of fuel. A barrel of light sweet crude fell $1.22 to $62.21 on the New York Mercantile Exchange.

Declining issues outpaced advancers 3-to-2 on the New York Stock Exchange, where volume came to 1.45 billion shares.

The Russell 2000 index of smaller companies fell 10.69, or 1.35 percent, to 782.02.

Overseas, Japan’s Nikkei stock average closed up 0.28 percent. At the close, Britain’s FTSE 100 was down 0.20 percent, Germany’s DAX index rose 0.13 percent and France’s CAC-40 fell 0.20 percent.