Stocks keep sliding

NEW YORK (CNNMoney.com) -- Stocks slumped Monday afternoon, as investors shrugged off a $45 billion deal in the utilities sector and opted to bail out of financial and transportation shares.

The Nasdaq (down 17.78 to 2,497.32, Charts) composite fell 0.7 percent with around 2-1/4 hours left in the session. The S&P 500 (down 3.95 to 1,447.24, Charts) index and the Dow Jones industrial average (down 28.20 to 12,619.28, Charts) both saw smaller losses.

News that utility TXU has agreed to be taken private in a $45 billion cash-and-debt deal highlighted a busy day for merger announcements and speculation.

However, the deals failed to rev up a stock market that has been in retreat most recently. After the Dow hit a record high early last week, and the Nasdaq and S&P 500 hit more than six-year highs, all three struggled through Friday.

"TXU is a mega deal, but I think the market is tired regardless," said Tom Schrader, managing director of U.S. equity trading at Legg Mason.

Oil prices seesawed following several sessions of gains.

Nonetheless, the stocks of companies that depend directly on fuel prices declined, including airlines, truckers and railroads.

Continental led the list of airline stocks sliding, dragging down the Amex Airline (Charts) index by over 1 percent.

Airlines, as well as a variety of truckers and railroads contributed to the decline for the Dow Transportation Average (down 129.10 to 5,029.83, Charts), which lost 2.4 percent.

Financial stocks tumbled too, including brokerages Merrill Lynch (down $1.98 to $87.06, Charts) and Morgan Stanley (down $2.68 to $78.29, Charts).

Market breadth was negative. On the New York Stock Exchange, losers topped winners 9 to 7 on volume of 950 million shares. On the Nasdaq, decliners beat advancers three to two on volume of 1.22 billion shares.

A big day for deals was highlighted by TXU (up $7.96 to $67.98, Charts), which agreed to a $45 billion cash and debt buyout led by two private equity firms and the private equity unit of investment bank Goldman Sachs. The deal is the largest private equity buyout in history. (Full story)

Dow Chemical (up $2.65 to $46.10, Charts) rose on speculation that it will get a leveraged buyout bid too - one that could be worth up to $54 billion, according to published reports.

Station Casinos (up $3.37 to $86.67, Charts) agreed to be taken private for $5.4 billion by a firm led by its management.

Temple-Inland (up $7.68 to $62.63, Charts) said it plans to spin off its real estate and financial services units and also sell its timberland business. Shares jumped 14 percent.

Tribune (up $0.32 to $31.02, Charts) inched higher on reports that Chicago real estate developer Sam Zell is looking to buy the newspaper publisher.

Among other movers, Dow component Merck (up $1.81 to $44.75, Charts) rose on a Citigroup upgrade.

U.S. light crude oil for April delivery rose 21 cents to $61.35 a barrel on the New York Mercantile Exchange, after having traded on both sides of unchanged all morning.

COMEX gold for April delivery rose $2.80 to $689.50 an ounce.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 4.63 percent from 4.67 percent late Friday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar fell versus the euro and the yen ahead of a surge of economic news due later in the week. Highlights include reports on durable goods orders, consumer confidence and existing home sales on Tuesday.

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