US stocks slipped in one of the lightest volume sessions of the year as investors took refuge in defensive shares after the latest corporate M&A failed to soothe concerns the recovery is stalling.
Technology shares weighed on the broad market and sent the Nasdaq composite lower as a possible bidding war over data storage company 3PAR between Hewlett-Packard and Dell sent shares of HP two per cent lower.
The bid comes on the heels of other deals last week, including acquisition offers from Intel and BHP Billiton and had pushed indexes higher at the session’s open.
“Overriding the M&A buzz -- which didn’t have a lot of longevity -- is the fact that economic data still remains very poor and there’s concern that the much-discussed soft patch has the potential to become something greater,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
Analysts said the recent spate of M&A also points to companies continuing to make profits through cost cutting rather than through revenue growth and highlights the economy’s weakness.
The Dow Jones industrial average slipped 39.21 points, or 0.38 per cent, to 10,174.41. The Standard & Poor’s 500 Index lost 4.33 points, or 0.40 per cent, to 1,067.36. The Nasdaq Composite Index fell 20.13 points.