[R]1:00PM NY, 5:00 PM Frankfurt European markets ended lower, dragged bu utilities and financial stocks.[/R]

European stock markets closed lower Monday, pressured by weakness in the financial-services sector and utility companies such as E.On. Another plunge of the Chinese stock prices also weighed on sentiment. China''s Shanghai Composite dropped 8.3% on profit-taking.

Utilities were among the most notable decliners, with shares of E.On falling 1.8%, RWE losing 0.6%, and Gaz de France falling 1.4%. On deal news front, U.K. real-estate investment company Segro lost 1.1% after it said it agreed to sell Slough Estates USA to Health Care Property Investors. French insurance group AXA fell 0.8% after the company said it is planning to sell its operations in Netherlands for 1.75 billion euros to SNS Reaal, pushing its shares up 4.4%. Zurich Financial Services added 1.4% after the group agreed to transfer part of its U.K. annuity business to Swiss Re.

In the pharmaceutical sector, drug maker Roche fell 1.3% as the majority owner of Genentech revealed data that showed its Avastin drug didn''t provide a survival benefit in colorectal cancer when combined with Folfox. The French CAC-40 dropped 0.7% to close at 6,125.81, while the U.K.''s FTSE 100 slipped 0.2% to 6,664.10 and the German DAX Xetra ended down 0.1% at 7,976.79.


[R]11:30AM U.S. market averages turned in a lackluster performance.[/R]

The U.S. market averages turned in a lackluster performance in late morning trading after posting a notable weakness at opening. The Dow traded lower, dragged by Citigroup (C: chart), Merck (MRK: chart), Coca-Cola (KO: chart), and Procter & Gamble (PG: chart), each falling about 1%. However, Wal-Mart (WMT: chart) and General Electric (GE: chart) limited the downward trend, rising 3% and 1.3%, respectively.

Airline stocks fell after Continental Airlines (CAL: chart) reported lower revenues per passenger in May. Continental shares dropped 3.6%. UAL Corp. (UAUA: chart) was the most notable decliner on the Nasdaq, falling 5.7%. The networking sector posted gains, with Avaya (AV: chart) rising 4% amid reports that it is close to a deal to be acquired by two private equity firms for more than $8 billion. Some computer hardware stocks also showed strong upwards moves. Palm (PALM: chart) jumped 8% after agreeing to sell 25% of the firm to a private-equity firm for $325 million

In other merger-and-acquisition news, Axa (AXA: chart) agreed to sell a Dutch unit for $2.35 billion to SNS Reaal of Holland. Accredited Home Lenders Holding (LEND: chart) surged 11% after the subprime mortgage firm agreed to be acquired by Lone Star Fund V L.P. for $15.10 a share in an all-cash deal.

Investors paid little attention to news that factory orders rose 0.3% in April, below the 0.8% expected by economists. The Dow Jones industrial average was down 26.33 points, or 0.19%, at 13,641.78. The Standard & Poor''s 500 Index was down 1.40 points, or 0.09%, at 1,534.94. The Nasdaq Composite Index was down 5.54 points, or 0.21%, at 2,608.38. The benchmark 10-year note was yielding 4.94% on Monday, a slight dip from 4.96% on Friday.


[R]9:45AM U.S. stocks opened in the negative, pressured by Shanghai weakness.[/R]

Wall Street opened in the negative, pressured by an overnight plunge in the Chinese stock market. Merger activity continued on Monday, helping to limit the downward trend. Dominion (D: chart) added 1% after it agreed to sell most of its U.S. gas and oil operations to Loews (LTR: chart) and XTO Energy (XTO: chart) for a total of $6.5 Billion.

Further in deal news, Avaya (AV: chart) rose over 3% amid reports that it is close to a deal to be bought by TPG Capital and Silver Lake Partners for $17 a share. Digene (DIGE: chart) surged 33% after Qiagen agreed to acquire the company for $1.6 billion in cash and stock. Flextronics International (FLEX: chart) fell 1.6% after it said it agreed to buy electronics maker Solectron in a cash-and-stock deal worth about $3.6 billion.

Acquisition news sent Accredited Home Lenders Holding (LEND: chart) 11% higher. The subprime mortgage firm agreed to be acquired by Lone Star Fund V L.P. for $15.10 a share in an all-cash deal. Among the very few companies reporting quarterly results, Krispy Kreme Doughnuts (KKD: chart) said its Q1 loss widened on falling revenue. The results came in below analyst estimate, and Krispy Kreme stock dropped 4.3%.

In the first hour of trading, the Dow Jones industrial average fell 29.34, or 0.21%, to 13,638.77. The Standard & Poor''s 500 index declined 2.35, or 0.15%, to 1,533.99, and the Nasdaq composite index lost 4.07, or 0.16%, to 2,609.85. Bonds edged higher, with the yield on the benchmark 10-year Treasury note falling to 4.95% from 4.96% late Friday.


[R]9:30AM The FTSE 100 is lower in mid-afternoon trade on weak media sector.[/R]

The FTSE 100 is 0.4% lower in mid-afternoon, trading at 6,651.2, a drop of 25 points.

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