NEW YORK ( TheStreet) -- Here are the top stock market headlines for the morning of Monday, May 17, 2010.

Monday's Early Headlines

  • Manufacturing Activity in New York Shows Surprise Decline in May -- The New York Federal Reserve's Empire State manufacturing index fell to a reading of 19.11 this month, down from a reading of 31.86 in April. Economists had forecasted a slight dip to 30, according to Briefing.com. The new orders index fell to 14.30 in May from 29.49 in previous month. Even so, the number of employees rose to 22.37 from 20.25 in April, a fifth consecutive month of increased employment.
  • BP Makes Progress in Gulf Oil Spill -- BP (BP) engineers on Sunday attached a mile-long tube to funnel oil gushing from a blown well out of the Gulf of Mexico into a tanker ship. However, The Associated Press reports that researchers said some of the millions of gallons of crude that has spilled into the water may have entered a major current that could carry it through the Florida Keys and around to the East Coast in the Atlantic Ocean.
  • Asian Markets Drop on Europe Debt Fears -- The Associated Press reports that Asian investors were worried that cost-cutting by Greece, Portugal and Spain in the wake of last week's $1 trillion bailout package could hamper a recovery in the eurozone economy and undermine export demand. Japan's Nikkei 225 stock average dropped 2.2%, China's Shanghai tumbled 5.1% to a one-year low, and Hong Kong's Hang Seng index lost 2.1%.
  • Psychiatric Solutions Agrees to $3.1 Billion Bid -- Universal Health Services (UHS) will acquire Psychiatric Solutions (PSYS) for $33.75 a share in cash, or about $2 billion. Universal Health, the hospital operator, also will assume about $1 billion of Psychiatric Solutions' debt, bringing the total value of the deal to about $3.1 billion. Excluding one-time costs related to the acquisition, Universal Health said Monday the transaction of Psychiatric Solutions, which operates mental-health facilities, is expected to be significantly accretive to its per-share earnings.
  • Astellas Agrees to Buy OSI Pharma for $4 Billion -- Astellas Pharma, the No. 2 drugmaker in Japan, reached an agreement to acquire OSI Pharmaceuticals (OSIP) for $4 billion. Astellas increased its offer for OSI to $57.50 a share, up from $52 the Japanese company had offered in March. The offer is a premium of 55% to the $37.02 closing price of OSI on Feb. 26, the last trading day Astellas announced its bid.

Monday's Earnings Roundup

  • Lowe's (LOW) reported a first-quarter profit of 34 cents a share on sales of $12.39 billion, compared with the Thomson Reuters average estimate for a profit of 31 cents a share on revenue of $12.24 billion. Looking ahead, Lowe's offered second-quarter earnings guidance that was below consensus, and shares were lower by 3.7% in early trading.
  • Sirius XM (SIRI) increased its 2010 guidance, saying it it now expects to see net subscriber additions total 750,000 in 2010, up from its previous forecast of 500,000. Sirius XM also raised its 2010 target for pro-forma adjusted income from operations to $575 million, up from its prior view of $550 million. Sirius XM also anticipates full-year pro-forma revenue of about $2.75 billion and free cash flow of more than $100 million.
  • General Motors reported first-quarter net income of $900 million or $1.66 a share, compared with a year-ago loss of $6 billion, or $8.78 a share. It was GM's first quarterly profit since 2007. Revenue was $31.5 billion, the automaker said.

-- Written by Robert Holmes in Boston.

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