Stocks suffer big drop at open
Oracle-Sun merger news and Bank of America's better-than-expected quarterly results don't provide lift to jittery investors.
NEW YORK (CNNMoney.com) -- Stocks opened lower Monday as a slew of merger and earnings news rattled investors.
The Dow Jones industrial average was more than 125 points lower. The Standard & Poor's 500 and Nasdaq 100 indexes were down about 1.8%.
Stocks rallied Friday, marking Wall Street's sixth straight week of gains. But the rally could be tested this week by jitters about quarterly results.
"Markets have been up six weeks in a row and people are a little nervous coming into a big earnings week," said Todd Leone, head trader at Cowen & Co. "That's not to say that things couldn't turn around."
Earnings: With an estimated 10% of the S&P 500 having reported results so far, profits are on track to have shrunk 37.4% from a year ago, according to the latest from Thomson Reuters.
About 140 companies, or 28% of the S&P 500 report results this week.
Before the bell, Bank of America (BAC, Fortune 500) reported earnings of 44 cents a share, considerably better than analysts expected, but the bank warned of "deteriorating credit quality" and shares of the company fell nearly 10%.
Drug maker Eli Lilly (LLY, Fortune 500)'s earnings also beat estimates.
Results from IBM (IBM, Fortune 500) and Texas Instruments (TXN, Fortune 500) were due after the close.
Deals: Tech giant Oracle (ORCL, Fortune 500) announced it will buy Sun Microsystems (JAVA, Fortune 500) in a deal worth $7.4 billion.
PepsiCo (PEP, Fortune 500) offered $6 billion to buy out shareholders of its two largest bottlers, Pepsi Bottling Group (PBG, Fortune 500) and PepsiAmericas (PAS). The soft drink maker also announced better-than-expected quarterly earnings.
In the drugs sector, British firm GlaxoSmithKline (GSK) agreed to pay up to $3.6 billion for independent skincare specialist Stiefel Laboratories. Stiefel is partly owned by private equity firm Blackstone Group (BX).
World markets: Stocks in Asia managed to end mostly in positive territory. Japan's Nikkei edged higher and the Hang Seng in Hong Kong rose nearly 1%. European markets, meanwhile, tumbled in midday trading.
Oil and money: Oil prices tumbled $3.43 a barrel to $46.90. The dollar was higher versus the euro and the British pound, but lower against the yen. 
