Stocks knocked back

NEW YORK (CNNMoney.com) -- Stocks slipped Monday as falling oil prices and a rash of corporate deals failed to rally investors concerned about reports on housing and testimony from Federal Reserve Chairman Ben Bernanke due later this week.

The tech-fueled Nasdaq (down 9.44 to 2,450.38, Charts) composite lost about 0.4 percent, while the Dow Jones industrial average (down 28.28 to 12,552.55, Charts) and the S&P 500 (down 4.69 to 1,433.37, Charts) index both saw smaller declines.

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Tuesday brings the December trade gap, expected to have widened to $59.5 billion in the month from $58.2 billion in the previous month.

Monday brought a mix of merger and acquisition reports. But any enthusiasm about those reports was countered by the impact of a 3.5 percent decline in oil prices.

Such a drop in oil can often boost stocks, but Monday's decline in crude dragged on energy stocks, which in turn limited the broader market's advance.

Investors were also wary at the start of a busy week that brings reports on retail sales, housing and manufacturing, as well as Fed Chairman Bernanke's visit to Capitol Hill, said Harry Clark, CEO at Clark Capital Management.

The Fed chairman gives his semiannual testimony before Congress on Wednesday and Thursday, and as always, his comments will be closely monitored for hints about the economy and interest rate policy.

He is not expected to deviate from recent comments by Fed officials, who have stressed that the economy is slowing at a reasonable pace, but that inflation pressures remain.

"If Bernanke said something unexpected, that could move stocks down, but I don't think there's much he could say that would give stocks a lift," Clark said.

He said that, after the market's latest advance, stocks are likely to drift or even decline a bit for the short term, particularly with the earnings reporting period over.

With around 75 percent of the S&P 500 fourth-quarter results having already been reported, earnings are currently on track to have risen just short of 11 percent.

Stocks slumped Friday amid a selloff in the tech sector and concerns about inflation following hawkish comments from a number of Federal Reserve officials.

Techs led the downdraft again Monday despite an upgrade of Apple (up $1.61 to $84.88, Charts) by brokerage Citigroup.

Among individual stocks, Home Depot (up $0.44 to $41.44, Charts) climbed about 1 percent on reports that it is considering the spinoff or sale of its HD Supply unit.

Four Seasons (down $2.52 to $81.36, Charts) said it agreed to be taken private for $3.8 billion, including debt, by an investment group that included a firm run by Microsoft (Charts) Chairman Bill Gates and Saudi Prince Alwaleed bin Talal.

Private equity firm Blackstone Group said it will acquire Pinnacle Foods Group, the owner of Vlasic Pickles, Duncan Hines and other brands, for about $2.2 billion. Pinnacle is owned by JP Morgan Partners and several other affiliates.

Vodafone (up $0.58 to $29.53, Charts) said it won a majority stake in Indian mobile firm Hutchison Essar, in a deal worth $11.1 billion.

Aluminum producer Novelis (up $5.13 to $43.67, Charts) rallied more than 13 percent after it agreed to be bought by India's Hindalco Industries for $6 billion in cash and debt.

Investors also considered several deals that didn't happen, including news that Nasdaq Stock Markets (Charts) failed in its $5.3 billion bid for the London Stock Exchange, while French drugmaker Sanofi-Aventis ended talks about a potential deal with Bristol-Myers Squibb (down $0.93 to $27.59, Charts).

U.S. light crude oil for March delivery sank $2.08 to settle at $57.81 a barrel on the New York Mercantile Exchange after the oil ministers of Saudi Arabia and Qatar said OPEC may keep crude output unchanged at its March meeting.

The slide in oil prices helped investor sentiment somewhat but also dragged on oil service stocks.

Exxon Mobil (down $0.62 to $74.60, Charts), Valero Energy (down $0.44 to $55.06, Charts), Sunoco (down $1.47 to $59.98, Charts) and a number of other oil stocks slipped, sending the Amex Oil (down 14.99 to 1,148.37, Charts) index down 1.3 percent.

COMEX gold for April delivery sank $5 to $667.30 an ounce. That sent a number of gold stocks lower, with the Amex Gold Bugs (down $3.17 to $336.89, Charts) index falling almost 1 percent.

Among other movers, Onyx Pharmaceuticals (up $11.89 to $24.15, Charts) nearly doubled on news that a late-stage study of its liver cancer treatment Nexavar prolonged the lives of study participants. The company - which partners on the treatment with German drugmaker Bayer - said it will seek approval this year to market the drug to patients with advanced liver cancer.

Market breadth was negative. On the New York Stock Exchange, losers beat winners three to two on volume of 1.32 billion shares. On the Nasdaq, decliners topped advancers nine to seven on volume of 1.89 billion shares.

Treasury prices slipped, lifting the yield on the benchmark 10-year note to 4.80 percent from around 4.78 percent late Friday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar rose versus the euro and yen after the weekend G7 meeting ended without members - finance ministers of the world's largest economies - specifically addressing the weakness of the yen, which recently fell to a 21-year low.

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