Dow component Boeing (BA: chart) supported the blue-chip average with a gain of 1.7%, followed by Home Depot Inc. (HD: chart), rising 1.6%. At the same time General Motors Corp. (GM: chart) weighed with a decline of 1.8%.

Verizon Communications (VZ: chart) was another drag on the Dow. The wireless communications provider posted an in-line-with-forecast 6% rise in profit, as well as a plan to buy Rural Cellular (RCCC: chart) for $2.7 billion. Verizon lost 1.9%, while Rural soared 33%.

Computer hardware sector posted a notable decline, with Lexmark (LXK: chart) falling 4% and Apple (AAPL: chart) losing 2.5%. Oil service, airline, and biotech stocks also came under pressure.

By late morning, the Dow fell 22.11, or 0.17%, to 13,243.36, after rising in earlier trading. The Standard & Poor''s 500 index fell 1.36, or 0.09%, to 1,457.59, and the Nasdaq composite index fell 4.01, or 0.16%, to 2,558.23. Bonds fell modestly, and the 10-year Treasury note''s yield edged up to 4.78% from 4.77% late Friday.


09:45AM Wall Street opened higher, but failed to sustain early gains.

Wall Street opened in the positive but soon afterwards declined as market failed to sustain the upward move after last-week selloff. Solid results from HSBC Holdings (HBC: chart) brought some relief as the biggest European bank reported a 25% profit rise and said bad debts in the U.S. were nearly the same as last-year levels. The stock rose 3.2%.

Deal news failed to offset negative sentiment. South Korean Doosan Infracore agreed to buy Ingersoll-Rand''s (IR: chart) Bobcat construction equipment unit for $4.9 billion. ABN Amro (ABN: chart) withdrew its recommendation of a takeover bid from Barclays (BCS: chart) citing the current value of the U.K. lender''s offer. ABN Amro gained 1.6%.

Strong earnings from some retailers helped limit losses. Humana (HUM: chart) jumped 3% and Tyson (TSN: chart) gained 3.3% after posting better-than-expected Q2 results. However, shares of RadioShack (RSH: chart) weighed on the retail sector with a decline of 10% after posting better-than-expected earnings but 15% lower sales.

In the first hour of trading, the Dow Jones industrial average fell 1.70, or 0.01%, to 13,263.77. The Standard & Poor''s 500 index rose 0.19, 0.01%, to 1,459.14, and the Nasdaq composite index fell 0.30, or 0.01%, to 2,561.94. Bonds held steady, with the 10-year Treasury note''s yield at 4.77%, the same as late Friday.


9:00AM U.S. stock futures pointed to a recover after a week of heavy losses.

U.S. stock futures pointed modestly higher on Monday, with markets trying to recover from heavy losses and four-year lows amid continued concerns in the credit market. Subprime worries subsided Monday after HSBC Holdings (HBC: chart), Europe''s largest bank, reported a 25% profit rise. It also said bad debts in the U.S. were nearly the same as last-year levels as it stopped underwriting subprime mortgages.

Among pre-market highlights, American Home Mortgage (AHM: chart) dropped 43% after the company delayed the payment of its quarterly dividend, citing the need to improve liquidity. In earnings news, ValueClick (VCLK: chart) fell 19% after it cut its earnings outlook, Verizon (VZ: chart) added 0.6% after it posted an in-line 6% profit rise and Humana (HUM: chart) rose 3% after it said its quarterly earnings more than doubled.

On the merger-and-acquisition news front, Verizon Communications (VZ: chart) announced Monday it agreed to acquire Rural Cellular Cop. (RCCC: chart) in a deal worth $2.7 billion. In overseas deal news, South Korea''s Doosan Infracore said it will buy Ingersoll-Rand''s (IR: chart) Bobcat construction equipment unit for $4.9 billion. S&P 500 futures rose 6.7 points at 1,464.70 and Nasdaq 100 futures rose 10.75 points at 1,974.25. Dow industrial futures rose 56 points.


8:30AM New York, 1:30 London – European markets trade lower ahead of New York opening. Takeover and earnings news dominate early trading.

European markets are trading lower at mid-day trading after a week of sharp losses tracking markets decline in the U.S. Spain and Germany lead the region with a loss of 0.6% followed by a loss of 0.3% in the UK, France, and Italy. Every market in the region is trading lower ahead of the opening in the U.S. and after the close of the Asian markets.

ABN Amro, the subject of takeover from two rival financial groups, said that it no longer recommends the offer from Barclays. The Dutch bank board apparently changed its mind after higher offer from Royal Bank of Scotland. Separately the Dutch bank also reported 7% decline in profit to 1.13 billion euros from $1.2 billion euros a year ago. The total operating income jumped 12.8% to 5.446 billion euros. Latin America and European business units played a key role in net revenue.

ICI rejected the revised offer from Akzo Nobel hoping that the company is valued at higher than the bid of $16 billion.

Spain based Telefonica reported the second quarter profit of 2.57 billion euros from 1.14 euros a year ago on one time asset sale. The telephone company revenue jumped 6.5% to 14.08 billion euros. Latin American business revenue jumped 13%, Spain revenue jumped 5.4% and European revenue increased 3.4%.

Stat Oil, Norwegian oil and gas company reported second quarter profit of 10.72 billion kroner from 9.6 billion a year ago on revenue gain of 1.2% to 108.8 billion kroners. The production of oil and gas in the quarter rose to 1.11 million barrels of equivalent oil, 2.7%. The company recently acquired oil and gas assets from Norsk Hydro.