Pfizer is negotiating a 2%-3% break-up fee with Allergan that would be in line with most deals, according to sources, a sign of confidence such a merger could overcome regulatory hurdles.

End-of-quarter selling and growing uneasiness about the US economy sent stocks sliding on Wall Street today, with Caterpillar and other industrials depressing blue chips and technology issues dragging the Nasdaq composite index to a five-month low.

Verizon Communications’ $6.7bn bid for MCI met with indifference today on Wall Street, where stocks barely budged in very light trading.