Wall Street declines

Wall Street extended its losses today as investors awaited a stream of key economic data this week and were left disappointed by the collapse of several closely-watched acquisition deals.

The markets, which pulled back last week amid concern about inflation's impact on interest rates, traded cautiously with Federal Reserve Chairman Ben Bernanke set to speak before Congress on Wednesday.

Government data due on Friday should shed light on wholesale inflation and the state of the housing market.

Unlike recent Mondays, there was a dearth of acquisition announcements to give the market a lift. Instead, investors had to deal with news that the Nasdaq Stock Market Inc failed in its bid to buy the London Stock Exchange and that French drugmaker Sanofi-Aventis called off talks for a possible deal with Bristol-Myers Squibb.

Onyx Pharmaceuticals and Bayer advanced after the companies released data from a clinical trial that showed an experimental drug is effective in fighting liver cancer. Apple moved higher after being upgraded in anticipation of big product launches this year.

Wall Street fell last week on concerns about higher oil prices and the possibility that inflation could lead to higher interest rates. With fourth-quarter earnings reports nearly over, investors have traded hesitantly as they wait for some kind of catalyst to give them direction.

"With all the data coming out, and Bernanke possibly taking a more hawkish tone, this causes the markets to be very cautious and tentative," said Alan Gayle, senior investment strategist for Trusco Capital Management. "There's just been a lot of nervousness going into this week, and the weak start is a carryover from last week."

The Dow Jones industrial average fell 28.28, or 0.22%, to 12,552.55.

Broader stock indicators declined. The Standard & Poor's 500 index was down 4.69, or 0.33%, at 1,433.37, and the Nasdaq composite index retreated 9.44, or 0.38%, to close at 2,450.38.

Bonds fell ahead of economic data due out this week, with the yield on the benchmark 10-year Treasury note up at 4.80% from Friday. The dollar was mostly higher against other major currencies, while gold prices dropped.

Oil, which advanced last week as cold weather in the US was seen to be increasing heating demand, fell on the New York Mercantile Exchange, with a barrel of light sweet crude closing at $57.81, down $2.08.

The drop caused major oil makers to tumble, with Dow industrial Exxon Mobil down 62 cents at $74.60; ConocoPhillips off 96 cents at $66.03; and Chevron lower by $1 at $72.32.

Jack Ablin, chief investment officer at Harris Private Bank, said he was worried about US investor sentiment since there had not been any big corporate or economic news behind the retreat.

"This looks like a quiet market with no economic news," he said. "I'm somewhat concerned that the market is tending to drift lower, and maybe there's a slight change in sentiment out there."

Investors and analysts have been digesting economic data, speeches by policymakers, and earnings reports to see if Wall Street can continue the rally at the end of 2006. So far, projections about the economy have been mixed - and left the markets drifting this year.

Nasdaq, the world's largest electronic equities exchange, fell after LSE shareholders did not approve its bid to acquire the British bourse. The US exchange reports fourth-quarter earnings tomorrow, and its shares fell $2.10, or 5.7%, to $35.10.

Bristol Myers tumbled 93 cents, or 3.3%, to $27.59 after a report that Sanofi-Aventis called off deal talks amid a disagreement over price.

But aluminium producer Novelis rose $5.13, or 13.3%, to $43.67 after it agreed to be bought by India's Hindalco Industries Ltd.

Home Depot, the world's largest home improvement store chain, said it is considering shedding its division that serves contractors, homebuilders, and other business customers. Shares rose 44 cents to $41.44.

Apple, which recently unveiled plans to roll out its long-anticipated iPhone, rose $1.61 to $84.88 after it was upgraded by a Citigroup analyst. Micron Technology shed 29 cents, or 2.3%, to $12.27 after it warned prices would drop this quarter.

Meanwhile, good news about a potential treatment for liver cancer sent Bayer up 62 cents to $58.45 and Onyx up $11.89, or 97%, to $24.15.

Advancing issues outpaced decliners by a 3 to 2 basis on the New York Stock Exchange, where volume totalled 1.32 billion.

The Russell 2000 index of smaller companies was down 1.32, or 0.16%, at 805.79.