U.S. MARKET AVERAGES

Stocks were weak Monday morning, reflecting a downbeat report on Google, downgrade of Starbucks and the lack of significant economic and earnings data. In addition,investors were nervous about the course of interest rates ahead of a speech from new Fed Reserve Chairman Ben Bernanke. Acquisition news involving Merrill Lynch was also in focus.

Technology stocks fell after Barron's warned in a negative article on Google(GOOG: chart) that the company’s shares could be cut in half over the next year on competition from Microsoft and Yahoo and pricing pressures for online ad sales.

UBS downgraded coffee chain operator Starbucks Corp to neutral from buy, citing a slowdown in the stock’s upside movement and a potential for slower same-store sales growth.

Merrill Lynch & Co is reported to be in advanced talks to acquire a large stake in fund manager BlackRock for $8 billion.

Microsoft (MSFT: chart) released software with push e-mail function built-in for handheld devices made by HewlettPackard, Chunghwa Telecom, Asus and Fujitsu Siemens. However, Research in Motion leads the push e-mail market with its popular BlackBerry device.

Opsware (OPSW: chart) broke to a new 52-week high on a distribution deal with Cisco (CSCO: chart). Brightpoint (CELL: chart) jumped to a fresh peak on a deal with Motricity to sell mobil content. W.R. Berkley (BER: chart)rallied more than 7% on earnings release, moving to a new high.

Impac Mortgage Holdings (IMH: chart) extended recent weakness to tick to a new low. Auto parts makers Lear (LEA: chart) and Dana Corp (DCN: chart) also moved to new lows.

In late morning trading, the Dow Jones industrial average declined 6.56, or 0.06%. The Standard & Poor''s 500 index was down 2.06, or 0.16%, and the Nasdaq dropped 14.56, or 0.64%.

Bonds extended last week''s decline. The yield on the 10-year Treasury note edging up to 4.59% from 4.58% late Friday, while the two-year Treasury yield held steady at 4.68%.

MOVERS AND SHAKERS

Agilent Technologies (A: chart), maker of electronic measurement solutions, announced Q1 profit more than doubled from last year. The company reported net income of $154 million, or 32 cents per share, up from $71 million, or 15 cents per share a year ago, exceeding estimates of 30 cents per share. Including a $2.7 billion gain from the sale of certain businesses, the company''s Q1 profit was $2.82 billion, or $5.83 per share. For Q2 the company predicted a profit range of 35-40 cents a share per share compared with analyst estimates of 36 cents per share. The stock fell 3.7%.

Genentech (DNA: chart) and majority owner Roche Holdings announced they stopped recruiting for a Phase III trial of Avastin to treat post-surgical adjuvant colon cancer. Outside of colon cancer, there were more deaths among those taking the Avastin therapy with Xelox than those taking Folfox or Folfox with Avastin, the companies said. The company’s shares fell 1.5%.

BlackRock (BLK: chart) surged 12% on report that Merrill Lynch & Co is in advanced talks to acquire a large stake in the fund manager for $8 billion.

The Home Depot Inc. (HD: chart) is in talks to buy a 49% stake in China''s Orient Home, one of the mainland''s leading do-it-yourself chains, for more than $200 million. The stock gained 1.6%.

Celestica Inc (CLS: chart), electronics manufacturing services company, was upgraded to buy from neutral at Merrill Lynch, citing valuation and expectations of improved operational performance. The stock rose 5.6%.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks finished largely in the negative with Tokyo leading the decliners. The Nikkei tumbled 2.3%, or 380.17 points on strong export data which renewed speculations that the Bank of Japan would tighten its monetary policy. South Korea’s Kospi and Sydney All Ordinaries fell 1.1% each, while the Bombay Stock Exchange Sensitive index gained 0.4% and Singapore Straits Times gained 0.3%.

European stocks closed in the positive Monday, boosted by strong auto sector gaining on the back of steady oil and weaker euro. Auto stocks like Volkswagen. BMW, DaimlerChrysler and Renault rose above 2%. The German DAX 30 rose 0.4%, the French CAC 40 gained 0.3%, and London’s FTSE 100 added 0.3%.

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