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US stocks dip despite M&A activity

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US stocks have slipped despite a flurry of merger and acquisition news this week.

Investors are also looking ahead to Federal Reserve Chairman Ben Bernanke’s testimony to Congress this week.

Yahoo!’s $US1.1 billion ($A1.13 billion) deal to buy blogging platform Tumblr temporarily helped to lift the Nasdaq above the flat line on Monday.

But the move was not enough to keep it there.

The Dow Jones Industrial Average shed 19.12 points (0.12 per cent) at 15,335.28.

The tech-rich Nasdaq Composite Index edged down 2.53 (0.07 per cent) to 3496.43 and the broad-market S&P 500 lost 1.18 (0.07 per cent) at 1666.29.

The leading indices drifted for much of the day after surging to new record-high closes on Friday.

Analysts said the market was taking a breather ahead of Bernanke’s testimony on the US economic outlook to Congress on Wednesday.

The release of US Federal Reserves minutes from the last policy meeting also had an impact.

Yahoo! shares rose 0.2 per cent after announcing an agreement to buy Tumblr for $1.1 billion in cash.

The two firms confirmed weekend reports of the tie-up, in a deal which helps the struggling internet pioneer connect with the privately held Tumblr’s youthful users.

“Tumblr gives Yahoo! scale in social media, and, that by itself is enough to argue the deal, at $1.1 billion, is brilliant,” said Douglas McIntyre of 24/7WallSt.com.

US drug maker Actavis agreed to acquire Irish rival Warner Chilcott for about $US8.5 billion in stock. Actavis shares advanced 1.3 per cent.

Private-equity firm Vista Equity Partners offered to buy internet security firm Websense for $US24.75 per share, or $US907 million. Websense soared 28.8 per cent to $US24.76.

Digital marketing business Acquity Group skyrocketed 113.6 per cent to $12.73 after management consultant firm Accenture announced late on Friday that it would pay $US316 million for the company.

Accenture shares rose 0.4 per cent.

Goldman Sachs fell 0.5 per cent after announcing it was selling the rest of its stake in the Industrial and Commercial Bank of China, worth around $US1.1 billion.

Bond prices were mixed.

The yield on the 10-year US Treasury rose to 1.96 per cent from 1.95 per cent late on Friday, while the 30-year was unchanged at 3.17 per cent. Bond prices move inversely to yields.