Drug downer, deals move markets

NEW YORK (CNNMoney.com) -- Stocks were looking for direction early Monday, as problems for drugmaker Pfizer sent the shares of that Dow component sharply lower in European trading but could be balanced by some multi-billion dollar mergers..

Stock futures were slightly lower, although a comparison to fair value, which predicts the direction of stocks at the open, showed stocks poised to open slightly higher, even as shares of Pfizer (Charts) fell 11 percent in Frankfurt.

Pfizer, the world's largest drugmaker, halted development on Saturday of its top experimental medicine, the cholesterol drug torcetrapib, due to safety concerns. The drug was seen as a key for Pfizer sales when its current cholesterol treatment Lipitor, the best selling drug in the world, loses U.S. patent protection in 2011.

In other corporate news, Bank of New York (Charts) agreed to be purchased by Mellon Financial (Charts) in a stock deal being called a merger by the two banks. The deal will pay about a 6.5 percent premium for Bank of New York shares, worth about $28.4 billion. The combination will create the largest securities servicing and asset management firm globally, according to the companies' news release.

LSI Logic (Charts), a maker of storage and DVD chips, said on Monday it would buy semiconductor and software storage company Agere Systems (Charts), in a $4 billion deal that represents a 28 percent premium for Agere shares.

But one deal that hit a bump was the bid by Carl Icahn and Harry Macklowe to buy office building owner Reckson Associates Realty (Charts), as Mack-Cali Realty pulled out of its partnership with Icahn and Macklowe, according to a statement by Reckson on Saturday. The partnership had bid $49 per share, or about $4.6 billion in cash, for the company, which had already approved a stock-and-cash takeover offer from New York office owner SL Green Realty.

Oil prices were lower, even as anti-American socialist Hugo Chavez claimed victory in the Venezuelan presidential election. His re-election to run the oil-rich nation had been widely expected. U.S. crude was down 64 cents at $62.79 a barrel, while Brent crude futures lost 66 cents to $63.96.

Stocks closed mixed in Asia Monday, while major indexes were little changed in early trading in Europe.

U.S. Treasurys were slightly lower in early trading, taking the yield on the 10-year note to 4.44 percent from the 4.43 percent level reached late Friday. The dollar was little changed against the euro but higher against the yen.

Pfizer plunges in Europe

More market news and futures ahead of U.S. open