Overnight Markets: Rush of deals fail to prop up Wall Street

Wall Street retreated on Monday after a flurry of deals, including takeover offers from Walmart and Unilever, failed to prevent investors from taking a break from a four-week rally.

Paring the biggest September gain in 71 years, the Standard & Poor’s 500 Index closed down 0.6% to 1,142. The Dow Jones Industrial Average lost 0.4% to close at 10,812 and the Nasdaq Composite was 0.5% lower to close at 2,370.

Moody’s move to slash Anglo Irish Bank’s senior debt to the lowest investment grade hit the markets, along with the reports that M&T ended talks with Santander to buy Sovereign Bank. M&T fell 7% and Bank of America and Travelers Cos. lost more than 1.8%.

A flurry of deals failed to lift investors out of the negative sentiment. However, Alberto-Culver jumped 20% after Unilever agreed to acquire the maker of hair-care products for $3.7 billion. AirTran rose 61% as Southwest Airlines offered nearly $1.4 billion.

Wal-Mart slipped 1.1% after the world's largest retailer offered to buy Massmart, South Africa's third-largest retailer by value, for more than $4 billion.

In current trading, Asian stocks declined on Tuesday, led by Japan, as concern grew that European government finances are worsening.

The MSCI Asia Pacific Index lost 0.3% to 127 as of 11 a.m. in Tokyo. Japan’s Nikkei 225 Stock Average sank 0.8% to 9,526. Australia’s S&P/ASX 200 Index lost 0.2% and South Korea’s Kospi Index dropped 0.3% to 1,856. Shanghai Composite Index was trading 0.4% lower at 2,617.

In company news, Newcrest Mining, Australia’s biggest gold producer, fell 1.3% as gold prices declined. Sony lost 0.6% as yield spreads showed perceptions of Ireland and Portugal’s creditworthiness are worsening.