Updated from 4:15 p.m. EST
Stocks had an upbeat open but closed lower Monday as the enthusiasm generated by a new round of corporate buyouts was tempered by cautionary remarks from the former
Dow Jones Industrial Average
fell 15.22 points, or 0.12%, to 12,632.26. Sixteen of the Dow's 30 components finished with losses, led by a 2% decline in
was off 10.58 points, or 0.42%, at 2504.52, pressured by losses in
"The market looked tired and nervous today," said Jay Suskind, head of institutional equity trading with Ryan Beck & Co. "There are a lot of headwinds to the economy. Even the strong M&A news this morning was counterbalanced by fears of the economy slowing."
Roughly 1.93 billion shares changed hands on the
New York Stock Exchange
. Decliners matched advancers. Volume on the Nasdaq reached 1.90 billion shares, with losers outpacing winners by a 3-to-2 margin.
was lower by 1.82 points, or 0.13%, at 1449.37.
Dealmaking was the story of the day, and the top arrangement will see Texas-based utility
go private through what will be the largest leveraged buyout in history. A group led by Kohlberg Kravis Roberts and Texas Pacific will pay $69.25 a share for the company; including assumed debt, the transaction is worth $45 billion.
Shares of TXU surged $7.91, or 13.2%, to close at $67.93.
"Things like this TXU deal excite the market," said Al Goldman, chief market strategist with A.G. Edwards. "Now we're already looking for the next deal."
accepted a buyout offer worth $8.8 billion, including $3.4 billion in debt that will be assumed. The arrangement will see Station acquired by Fertitta Colony Partners, a firm started by the company's founding family. Station Casinos ended with a gain of $3.20, or 3.8%, at $86.50.
However, early buying interest was dampened by comments from former Fed chairman Alan Greenspan, who said during a business conference in Hong Kong that the U.S. economy could face a recession.
"When you get this far away from a recession, invariably forces build up for the next recession, and indeed we are beginning to see that sign," said Greenspan. "While yes, it is possible we can get a recession in the latter months of 2007, most forecasters are not making that judgment and indeed are projecting forward into 2008."
Returning to equities,
XM Satellite Radio
closed lower on the Nasdaq after the company posted a greater-than-expected fourth-quarter loss, even though the company beat the Thomson First Call average revenue estimate.
XM, which said a week ago that it will merge with rival
pending regulatory approval, fell by 17 cents, or 1.1%, to finish at $14.93.
As for the day's research calls, Friedman Billings upgraded
to outperform from market-perform and raised its price target by $10, while RBC lifted its rating on BlackBerry maker
Research In Motion
to outperform from sector-perform.
National Semi tacked on 7 cents, or 0.3%, at $25.57. RIM climbed $6.77, or 4.8%, to $146.77.
Two Dow stocks,
, ended with gains after getting upgrades of their own. Coke was up 0.1% at $47.72, and Merck added 3.6% to finish at $44.48.
"We endured sloppy trading last week without any economic data," said Goldman. "The market should be in a correctional mode until we get some more economic data later this week. It's still a bull market, but we still may have some more rest and relaxation ahead of us."
In the absence of any economic releases to start the week, Treasury prices were climbing on the short and long ends. The 10-year was up 11/32 in price, yielding 4.63%, and the 30-year bond advanced 23/32 to yield 4.73%.
Later this week, traders will be sifting through reports on durable goods orders and new home sales from January, as well as the preliminary read on fourth-quarter gross domestic product, among other releases.
Commodities were generally stronger. Crude oil gained 25 cents to close at $61.39 a barrel, and gold ended up $3.10 to $689.80 an ounce.
Stocks were mostly higher in Europe and in Asia. London's FTSE 100 was better by 0.5% to 6432, and Frankfurt's Xetra DAX was 0.5% stronger at 7028. Tokyo's Nikkei added 0.2% at 18,215, while Hong Kong's Hang Seng slipped 1% to 20,508.