European stock markets finished slightly lower on Monday, despite merger-and-acquisition activity, with Akzo Nobel and rival paint producer Imperial Chemical Industries in focus.

ICI jumped 15.6% after rejecting a 600-pence takeover approach from Akzo Nobel whose shares dropped 1% on concerns it may improve its offer for the Dulux paints producer. At the same time other chemicals companies posted gains, with BASF rising 2.2%, and Clariant, moving up 0.8%.

Among other companies in the spotlight today, BHP Billiton rose 0.8% amid reports that it is reviewing plans for a $40 billion takeover of aluminum giant Alcoa. Adecco gained 2.3% after it revealed a deal to buy Germany's Tuja. On the side of the losers, Pearson lost 1.3% amid a report that it and General Electric Co are considering a joint bid for Dow Jones.

The German DAX 30 rose 0.1% at 8,036.12, while the U.K.'s FTSE 100 dlost 0.4% at 6,703.50 and the French CAC 40 fell 0.3% at 60.87.15.


11:30AM U.S. market averages turned flat, hurt by worries about mortgage markets.

Stock market averages turned in a lackluster performance in late morning trading, unable to sustain the earlier gains made on the heels of merger-and-acquisition new. Market failed to extend last-week rally, despite a report that BHP Billiton is planning a bid for Alcoa. Shares of the aluminum giant rose 2.5%. Gains by health insurance and oil stocks also helped to limit the downside.

Worries about the subprime sector reignited on news that a group of hedge fund managers at Bear Stearns try to line up new investors to keep a fund invested in subprime assets afloat. According to a report Merrill Lynch & Co. (MER: chart) had taken control of $400 million of loan assets underlying a troubled hedge fund at Bear Stearns Cos. Inc. (BSC: chart) that was heavily invested in subprime loans. Shares of Bear Stearns slipped 1.3%.

Among individual stocks, Lee Enterprises (LEE: chart), newspaper publisher, slipped 95 after the company projected lower-than-expected Q3 earnings. Shares of CyberSource (CYBS: chart), electronic payment company, dropped 75 after it agreed to acquire Authorize.Net (ANET: chart) for $565 million in cash and stock. On the positive side, Genesco (GCO: chart) climbed 8.2% after the retailer agreed to be acquired by Finish Line (FINL: chart) for $1.5 billion in cash.

The Dow Jones industrial average was down 10.16 points, or 0.07%, at 13,629.32. The Standard & Poor's 500 was down 0.66 points, or 0.04%, at 1,532.25. The Nasdaq Composite Index was down 2.09 points, or 0.08%, at 2,624.62. U.S. Treasury yields moved higher, providing another worry for the market. The yield on the benchmark 10-year Treasury note rose to 5.18%.


9:45AM U.S. stocks opened higher, boosted by Alcoa.

U.S. stock market advanced at opening Monday, trying to extend last-week rally on the back of deal-making news. Dow component Alcoa (AA: chart) gained 2% after a report said that BHP Billiton was considering a $40 billion acquisition bid of the aluminum producer.

Boeing (BA: chart) also drew attention as the Paris Air Show began and the airline carrier signed two small contracts. The stock lost 0.3%. General Electric (GE: chart) and Pearson are reportedly planning to launch a joint $5 billion bid for Dow Jones & Co. (DJ: chart), which would rival a $5 billion offer made by News Corp. (NWS: chart). Shares of Dow Jones rose 0.6%.

Further in deal action, Nymex Holding (NMX: chart) declined 2.3% after the Chicago Mercantile Holdings (CME: chart) said it is not in talks to buy the commodities exchange. On the economic news front, the National Association of Homebuilders is scheduled to release its housing index for June.

In the first hour of trading, the Dow rose 14.72, or 0.11%, to 13,654.20. The Standard & Poor's 500 index was up 1.01, or 0.07%, at 1,533.92, and the Nasdaq composite index added 1.75, or 0.07%, to 2,628.46.


9:00AM U.S. stock futures predict higher opening, helped by deal speculation.

U.S. stock futures posted modest gains on Monday, supported by deal speculation involving aluminum producer Alcoa. Investors were also awaiting signals of whether market will continue to recover and bond yields will remain in check. With little other economic news due out at the beginning of the week, data on the U.S. housing market is expected Monday afternoon.

Alcoa (AA: chart) shares rose 2.4% in pre-market trading amid reports that BHP Billiton is reviewing plans to buy the aluminum producer. Among other companies in focus, British Imperial Chemical Industries (ICI: chart) rejected $14.2 billion offer from Akzo Nobel.