Stocks Edge Down Despite Merger News

U.S. stocks lost ground as investors chewed over news of HP's offer for 3Par amid a dearth of economic data.
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NEW YORK (

TheStreet

) -- Stocks closed modestly lower Monday in a largely listless session that saw the major equity indices give up early gains in the wake of a fresh round of merger and acquisition news.

Both the

Dow Jones Industrial Average

and the

S&P 500

traded near the flatline for much of the day before falling off late, while the

Nasdaq

spent most of the session in the red. In the absence of any new economic data, investors had little to ponder except

Hewlett Packard's

(HPQ) - Get Report

decision to enter a bidding war with

Dell

(DELL) - Get Report

for

3Par

(PAR) - Get Report

, and were ultimately less than impressed by this latest evidence that consolidation is on the upswing.

Stock Wrap: The Real Story, August 23

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The Dow ended the day 39 points lower, or 0.4%, at 10,174. The S&P 500 fell back by 4 points, or 0.4%, to 1067, while the Nasdaq shed 20 points, or 0.9% to 2160. Earlier in the session, the Dow briefly pushed above 10,300.

Hewlett Packard jumped in early Monday with what it called a "superior" proposal to acquire 3Par, a maker of storage technology, for $24 a share in cash, or $1.6 billion. The bid is well ahead of the $18 a share offer that Dell made last week. HP shares slipped 2% to $39.04 while 3Par's stock soared 44.4% to $26.05. Dell's stock was down by 1.1% at $11.94.

Also on Monday,

HSBC Holdings

(HBC)

, Europe's largest bank by capitalization, entered exclusive talks with

Old Mutual

to possibly pick up a majority stake in

Nedbank

, South Africa's fourth largest banking group by total assets.

Additionally,

SABMiller

, the world's second-largest brewer, is considering buying the beer operations of Australia's

Foster's

, according to The

Sunday Times of London

.

"Certainly you'd expect markets to get a pop from all the recent M&A activity because it signals that companies that are healthy and companies that are flush with cash feel that it's a good time to part with some of that cash and pick up companies that they perceive as cheap. So it's a pretty bullish sign for the future," said Jay Suskind, senior vice president at Duncan Williams.

"But it's late August and there's still a lot of uncertainty out there," Suskind continued. "We still don't know what's happening with the Bush tax cuts; we have the November elections, and some of the recent macroeconomic news has been problematic. I think it's the macro view that's holding back a market that historically would have barreled forward on this M&A news."

Overseas on Monday, Hong Kong's Hang Seng slipped 0.4% and Japan's Nikkei fell 0.7%. The FTSE in London rose 0.8% and the DAX in Frankfurt inched 0.1% higher.

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>>Commodities and the Dollar

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The Economy

There were no economic releases scheduled for Monday's session.

>>Overview

>>Company News

>>Commodities and the Dollar

>>Treasuries

Company News

Capital goods and tech stocks were the session's worst performers with

Caterpillar

(CAT) - Get Report

serving as the Dow's biggest laggard followed by

Cisco Systems

(CSCO) - Get Report

,

Hewlett-Packard

(HPQ) - Get Report

and

Boeing

(BA) - Get Report

.

Meanwhile,

Wal-Mart

(WMT) - Get Report

,

Merck

(MRK) - Get Report

and

Exxon Mobil

(XOM) - Get Report

topped the Dow's percentage gainers.

Potash Corp. of Saskatchewan

(POT)

officially rejected

BHP Billiton's

(BHP) - Get Report

$130-a-share acquisition offer and said it has been discussing alternatives with several third parties. Potash shares rose 0.4% to $150.30 and BHP's stock finished 0.5% lower to $67.10.

Poultry processor

Sanderson Farms

(SAFM) - Get Report

saw profits and sales dip in the third quarter from the prior year on weaker poultry market prices and sluggish food service demand. Earnings of $1.55 a share fell short of the $1.87 a share that analysts had been expecting, according to Briefing.com. The stock gained 6.1% at $45.80.

Closeout retailer

Tuesday Morning

(TUES) - Get Report

saw shares tick 2% higher to $3.66 after it swung to a fourth-quarter profit of 3 cents a share, topping Wall Street's target by 2 cents. Fourth-quarter sales rose 6.4% to $200.8 million year-over-year, while same-store sales grew 6% during the quarter.

Asia's largest refiner by capacity

China Petroleum & Chemical (Sinopec)

(SNP) - Get Report

reported a better-than-expected net profit of 35.5 billion yuan for the first half of 2010, which was 6.7% higher than the same period a year ago.

>>Overview

>>The Economy

>>Commodities and the Dollar

>>Treasuries

Commodities and the Dollar

Crude

oil for October delivery shed 72 cents, to settle at $73.10 a barrel.

Elsewhere in commodity markets, the December gold contract traded 30 cents lower to settle at $1,228.50 an ounce.

The dollar was trading lower against a basket of currencies, with the dollar index up by 0.1%.

>>Overview

>>The Economy News

>>Company News

>>Treasuries

Treasuries

The benchmark 10-year Treasury was up by 1/32, lowering the yield to 2.595%.

The two-year note was up 1/32, diluting the yield to 0.487%. The 30-year bond was ahead by 2/32, downing the yield to 3.659%.

--Written by Melinda Peer and Sung Moss in New York

.

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>>The Economy

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.