Yahoo drives US stocks down

Wall Street pulled back today after Microsoft’s decision to withdraw its bid for Yahoo and as oil prices rose to a new record over 120 dollars a barrel.

Microsoft had offered 47.5 billion to buy Yahoo, but scrapped the bid at the weekend 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.

A jump in oil prices raised concerns that inflation could force consumers, who account for more than two-thirds of the US economy, to cut their spending on discretionary items.

Crude oil futures for June delivery surged to a new trading high of 120.21 a barrel on the New York Mercantile Exchange before pulling back.

The jump followed news of an attack on a Nigerian oil facility.

The Dow Jones industrial average fell 88.66, or 0.68%, to close at 12,969.54.

Broader stock indicators also declined.

The Standard & Poor’s 500 index fell 6.41, or 0.45%, to 1,407.49, and the Nasdaq composite index fell 12.87, or 0.52%, to 2,464.12.