* Dollar slips vs yen as BOJ move limited
* M&A activity underpins equity markets
(Updates with U.S. midday trading)
By Al Yoon
NEW YORK, Aug 30 (Reuters) - World stocks fell on Monday on
skepticism that governments can reverse a slowdown in global
growth, while the yen resumed its rally after Japan's action to
expand loans to banks disappointed investors who had wanted
more aggressive measures to curb the currency's rise.
Investors' worries about the economy also weighed on the
price of crude oil, while U.S. Treasury prices rose in a
rebound from a sharp sell-off on Friday after Federal Reserve
Chairman Ben Bernanke signaled that the U.S. central bank was
not on the verge of a new round of bond buying.
A government report on Monday that U.S. consumer spending
rose at the strongest pace in four months in July did little to
to reverse a bearish tone set by a string of other data
suggesting the economy is slowing.
The Commerce Department data also showed that consumer
spending, which typically accounts for about two-thirds of U.S.
economic activity, was supported by a small rise in incomes.
For details, see [].
Investors were also hesitant ahead of more closely watched
data on manufacturing, services and August non-farm payrolls
due later in the week.
European markets were subdued on Monday, with British
markets closed for a bank holiday.
"Equity markets are going to be a little bit defensive this
week as the economic data is likely going to show more slowing
in the economy," said John Brady, senior vice president at MF
Global in Chicago.
At midday in New York, the Dow Jones industrial average
<> fell 65.13 points, or 0.64 percent, to 10,085.52. The
Standard & Poor's 500 Index <.SPX> slipped 6.99 points, or 0.66
percent, to 1,057.60 and the Nasdaq Composite Index <>
declined 15.55 points, or 0.72 percent, to 2,138.08.
Bank stocks took the brunt of selling. Citigroup <C.N> fell
1.1 percent to $3.72, while JP Morgan <JPM.N> fell 1.1 percent
to $36.19. The BKW Bank Index lost 1.34 percent.
A burst of merger and acquisition action was not enough to
turn stocks positive.
Genzyme Corp <GENZ.O> rose 3.7 percent to $70.10 after
France's Sanofi-Aventis SA <SASY.PA> disclosed a cash offer of
$18.5 billion, or $69 per share, to buy the U.S. biotechnology
company. Later, Genzyme broke a five-week silence to reject the
bid. For details, see []
Genzyme rose 3.8 percent to $70.18, but U.S.-listed shares
of Sanofi <SNY.N> fell 0.1 percent to $28.90.
Expectations of increased mergers and acquisitions have
buoyed stock markets in recent days as the activity often
bolsters the equity of the parties or their sectors.
"There is a lot of cash still out there for a lot of these
companies, and they need to start using it," said Joe Saluzzi,
co-manager of trading at Themis Trading in Chatham, New Jersey.
"It makes sense for them to see if they can get some value."
Intel Corp <INTC.O> agreed to buy the wireless unit of
German chipmaker Infineon Technologies AG <IFXGn.DE> for $1.4
billion, enabling the U.S. chipmaker to boost its presence in
the smartphone market. Intel shed 2 percent to
$18.02.[]
Dell Inc <DELL.O> said it was assessing its bid for data
storage company 3PAR Inc <PAR.N> after 3PAR's board called
Hewlett-Packard Co's <HPQ.N> $2 billion offer a "superior
proposal." []
MSCI's all-country world stock index <.MIWD00000PUS> and
the Thomson Reuters global stock index <.TRXFLDGLPU> both fell
about 0.1 percent. MSCI's emerging market sub-index <.MSCIEF>
gained 0.3 percent.
In Europe, the FTSEurofirst 300 <> ended slightly
lower, as the concerns about the global economic recovery
outweighed support from the merger and acquisition news.
The pan-European FTSEurofirst 300 closed down 0.1 percent
at 1,025.48 points. Trading was thin, with volumes on the index
just 50.1 percent of the 90-day average.
Pharma shares featured among the best performers, with
Sanofi-Aventis <SASY.PA> up 0.7 percent.
Japanese stocks closed up nearly 1.8 percent, but only
after paring strong gains when the Bank of Japan made minor
tweaks in policy, disappointing markets looking for more
aggressive action against deflation. The yen rose broadly.
"The market was underwhelmed," said Marc Chandler, global
head of currency strategy at Brown Brothers Harriman in New
York. "Japanese officials continued to struggle to get ahead of
the curve of expectations."
The yen hit the day's high against the dollar and the euro
after Bank of Japan Governor Masaaki Shirakawa said after
meeting with Prime Minister Naoto Kan that Kan had not made any
requests on the central bank's monetary policy.
The dollar fell 0.6 percent against the yen <JPY=> at 84.67
yen, close to a session low of 84.53 yen.
The dollar rose 0.15 percent against a basket of currencies
<.DXY>. The euro fell 0.6 percent to $1.2689.
U.S. Treasury debt prices rose as traders clawed back some
of Friday's sharp losses, when Fed Chairman Bernanke signaled
the U.S. central bank was not on the verge of a new round of
bond buying.
Yields on benchmark 10-year Treasury notes
<US10YT=RR>declined 0.11 percentage point to 2.54 percent.
In commodities, U.S. light sweet crude oil <CLc1> fell 63
cents, or 0.84 percent, to $74.54 per barrel. Gold <XAU=> rose
35 cents, or 0.03 percent, to $1236.50.
(Additional reporting by Jeremy Gaunt, Atul Prakash, Brian
Gorman and Jessica Mortimer in London and Chuck Mikolajczak,
Edward Krudy and Chris Reese in New York; Editing by Leslie
Adler)
