Stocks Weaker At The Start As Yahoo Pulls Microsoft Offer

NEW YORK (MarketWatch) -- U.S. stocks opened lower on Monday after Microsoft Corp. dropped its $50 billion offer for Yahoo Inc. and an analyst said Bank of America Corp. should abandon its takeover of Countrywide Financial Corp.

The Dow Jones Industrial Average slid 54.39 points to 13,000.96, with 24 of its 30 components trading in the red, with Banc of America among the index's decliners, its stock falling 1.4%.

Shares of Countrywide , the nation's biggest mortgage company, also fell, recently down 12.7% after Friedman Billings Ramsey & Co. Paul J. Miller Jr. said Bank of America is likely to negotiate a sharply lower price for Countrywide, but should walk away, as "CFC's loan portfolio will prove a drag on earnings."

Blue-chip gains were led by Microsoft , its stock up 3% in the wake of its weekend decision to pull the plug on its takeover attempt of Internet portal Yahoo
.

Off the Dow, shares of Yahoo were down 18.9%.

The S&P 500 shed 4.42 points to 1,409.48, and the technology-heavy Nasdaq Composite declined 7.17 points to 2,469.82.

At 10 a.m. Eastern, the Institute of Supply Management releases its gauge of non-manufacturing activity, with the market looking for a reading of 49, under the 50 level indicating ongoing economic weakness.

European shares weakened a touch on Monday. London was closed for a holiday.

By Kate Gibson