10:55 AM New York – U.S. indexes accelerated the decline after disappointing manufacturing and construction spending data. European Central Bank hinted at short term bond buying. Valeant agreed to acquire Medicis for $2.6 billion and Onex is in a deal with SGS International for $813 million.

U.S. indexes opened lower and accelerated the decline after the release of manufacturing data and construction spending.

The Institute for Supply Management released August manufacturing index decreased to 49.6 from 49.8 in July, third monthly decline in a row. The index that tracks new orders, declined to 47.1 from 48 in July and its worst level since April 2009.

at 10:00 a.m. ET and economists are estimating the index to improve to 50.1 from the 49.8 in July.

The Commerce Department said construction spending in July fell 0.9% to annual rate of $834 billion after rising 0.4% in June. Economists were expecting spending to increase at least 0.4%.

Ahead in the week, investors are set to review the non-farm payrolls and ADP private sector employment reports in addition to the weekly jobless claims.

European leaders ramp up diplomacy this month as the three-year old financial crisis refuse to go away.

European Central Bank is expected to announce its decision regarding bond purchase on Sept 6. On that day, European Commission President Jose Barroso and Chancellor Merkel are set to travel to Madrid to meet Spanish Prime Minister Mariano Rajoy.

Moody's Investors Service lowered the European Union’s long-term issuer rating outlook to negative from stable.

The Reserve Bank of Australia retained the benchmark cash rate unchanged at 3.5% for the third month in a row and Australia is expected to announce robust second quarter economic growth tomorrow.

OECD Area Inflation Eases

Annual inflation in the Organization for Economic Cooperation and Development area rose 1.9% in July from 2% in June, latest data showed.

In the United States, inflation slowed to 1.4% in July, from the 1.7% in June.

Valeant Agrees to Acquire Medicis

Valeant Pharmaceuticals International, Inc. agreed to acquire U.S.-based Medicis Pharmaceutical Corp. for approximately $2.6 billion.

Valeant will pay Medicis $44 a share in cash, representing a 39% premium to Medicis' closing stock price of Friday.

The pro forma net revenue for the combined company's dermatology and aesthetics businesses for 2012 is expected to exceed $1.7 billion within the United States.

Onex to Acquire SGS International

Onex Corporation agreed to acquire SGS International, Inc., design-to-print graphics services provider for $813 million. The transaction may close in the fourth quarter.

FormFactor, Inc. signed a merger agreement with Astria Semiconductor Holdings, Inc. to acquire MicroProbe for $100 million in cash and $16.8 million in stock.