Weak start seen for stocks

NEW YORK (CNNMoney.com) -- U.S. stocks are pointing to a weak open Monday after Home Depot agreed to cut the sales price of its wholesale supply unit, the latest sign that the credit crunch is hitting deals.

At 6:01 a.m. ET, Nasdaq and S&P futures were lower, with a comparison to fair value pointing to a negative start for Wall Street.

Home Depot (Charts, Fortune 500) has tentatively agreed to sell its supply unit to a trio of private equity firms for $1.8 billion less than originally agreed upon, according to published reports. Shares of the No. 1 home improvement retailer, a Dow component, were down about 1 percent in light early trading in Frankfurt Monday.

An official announcement is expected early Monday. Reports said the new terms will have the private equity firms - Bain Capital, Carlyle Group and Clayton, Dubilier & Rice - pony up more equity and Home Depot will take on $1 billion of debt as well as an equity stake in the supply unit. The revised terms could signal more challenges ahead for other buyouts as banks balk at financing such deals.

Still, there were two new deals for consideration of investors Monday. Late Sunday U.S. Steel (Charts, Fortune 500) announced an agreeement to acquire Canadian rival Stelco for about $1.1 billion in cash, a 43 percent premium from Stelco's closing price in Canada Friday.

Then early Monday, Taiwanese personal computer maker Acer said it will buy Gateway (Charts) for $710 million, creating the world's No. 3 PC maker in a move to double Acer's presence in the highly competitive U.S. market. Acer will pay $1.90 per Gateway share, a 57 percent premium over Friday's close.

And the Financial Times reported Monday that Wal-Mart Stores (Charts, Fortune 500) is looking at U.S. acquisitions for the first time in more than 25 years in an effort to spur growth in its home market.

A credit crunch triggered by the subprime crisis has sent tremors through global financial markets, and investors have been on edge for the better part of the last month. Volatility is likely to persist, especially ahead of the Federal Reserve's meeting on Sept. 18.

Late Friday, in a clear sign that the credit crunch is still affecting the nation's largest financial institutions, the Federal Reserve agreed to bend key banking regulations to exempt Citigroup (Charts, Fortune 500) and Bank of America (Charts, Fortune 500) from rules that effectively limit the amount of lending that their federally insured banks can do with their brokerage affiliates.

A survey of top U.S. business economists released early Monday said the risk of massive defaults on subprime mortgages and heavy debts now poses a bigger threat to U.S. economic prosperity than terrorism.

Investors have a heavy economic calendar to capture their attention this week. The stream of reports kicks off Monday with a reading on July existing home sales due at 10 a.m. ET.

Wall Street turned in an upbeat performance on Friday, as the new home sales report came in much better than forecasts. That helped fuel a jump in Asianstocks Monday. In Europe, most markets rose in morning trading. Markets in London were closed for a holiday.

Treasury prices fell in early trading, taking the yield on the 10-year note to 4.63 percent from 4.61 percent late Friday. The dollar was higher versus the euro but lower against the yen.

Oil prices were slightly higher in early trading, as refinery problems rekindled gasoline supply concerns. U.S. light crude gained 10 cents to $71.10 a barrel in electronic trading.