NEW YORK – Wall Street fell for the first time in four sessions on Monday as concerns about the technology and energy sectors overshadowed some $81 billion in takeover activity.
Stocks spent most of the day in positive territory as investment bankers squeezed in more deals before year end, and helped keep a floor under share prices for most of the day. The transactions add to an unprecedented period for mergers and acquisitions.
Among the bigger deals announced, pharmacy benefits manager Express Scripts Inc. said it was offering to buy rival Caremark RX (CMX) for about $26 billion. Realogy Corp. (H), which owns the Coldwell Banker real estate franchise, said it agreed to be acquired by private equity firm Apollo Group for about $6.65 billion.
"What is driving mergers and acquisitions is strong stock prices, that gives companies the currency to go out and do deals," said Steven Bernard, director of M&A market analysis at investment bank Robert W. Baird. "This still means there's a lot of deals out there, and we expect the strength we're seeing will continue into 2007."
However, the shopping spree by companies and private equity firms was not enough to stave off losses during the session. Investors sold off shares of ExxonMobil Corp. (XOM) due to a sharp drop in crude, and questioned the sustainability of profits at Google Inc. (GOOG).
The Dow Jones industrial average fell 4.25, or 0.03 percent, to 12,441.27. The Dow for most of the session traded above Friday's record close of 12,445.52.
Broader stock indicators were lower. The S&P fell 4.61, or 0.32 percent, to 1,422.48, and the Nasdaq composite fell 21.63, or 0.88 percent, to 2,435.57.