* M&A supports global stocks, techs weigh on Wall Street
* Oil erases early gains, drops $1 as dollar gains
* Treasuries fall on profit taking, euro weakens further
(Updates with European markets close)
By Walter Brandimarte
NEW YORK, Aug 23 (Reuters) - A slew of corporate takeover
activity helped global stocks recover from a one-month low on
Monday, but oil prices fell about 1 percent as the dollar
strengthened against major currencies.
Despite the improved market sentiment, which also
encouraged some selling of safe-haven U.S. Treasury debt,
stocks trimmed gains later as technology shares plummeted on
Wall Street.
The euro weakened further, hurt by persistent concerns over
the euro zone economy.
The recovery in stocks markets was prompted by news of
several merger and acquisition deals, considered a sign that
companies are making use of high cash balances and historically
low borrowing costs to look for bargains and expand their
business.
"The whole market is geared to M&A activity," said David
Buik, senior partner at BCG Partners. "We're of the opinion
that the quality of economic data across the world is poor, but
on the other side of the coin there is enough M&A activity out
there to limit any kind of a fall in the immediate future."
Among the deals, Campbell Soup Co <CPB.N> may make a $2.3
billion break-up bid for Britain's United Biscuits, owned by
private equity firms PAI Partners and Blackstone Group LP
<BX.N>, the London-based Sunday Times reported. For details,
see [].
HSBC is also in talks to buy a stake in South Africa's
Nedbank in a potential $6.8 billion deal. In Asia, an estimated
$58 billion worth of M&A was playing out Monday.
Hewlett-Packard Co <HPQ.N> offered $24 a share in cash for
data storage company 3PAR Inc<PAR.N>. The $1.6 billion offer
tops a competing bid by technology rival Dell Inc <DELL.O> and
fears of a bidding war weighed on HP's shares, dragging tech
stocks down. [].
The three main U.S. stock indexes rose nearly 1 percent
after the market opened but trimmed gains later, with the
Nasdaq turning negative.
At around noon in New York, the Dow Jones industrial
average <> was up 6.32 points, or 0.06 percent, at
10,219.94, while the Standard & Poor's 500 Index <.SPX> gained
1.27 points, or 0.12 percent, to 1,072.96. The Nasdaq Composite
Index <> dropped 8.67 points, or 0.40 percent, to
2,171.09.
The MSCI All-Country World equity index <.MIWD00000PUS>
rose 0.19 percent while the FTSEurofirst 300 index <> of
top European shares closed up 0.67 percent, following three
consecutive session of losses.
Mining shares gained as financial markets bet Australia's
inconclusive weekend elections would lead to a change of
government, spelling the end to a plan to impose tax on major
iron ore and coal mines.
The STOXX Europe basic resources index <.SXPP> rose 2.96
percent, while BHP Billiton <BLT.L>, Anglo American <AAL.L>,
Antofagasta <ANTO.L> and Rio Tinto <RIO.L> gained 0.6 percent
to 1.6 percent.
U.S. crude oil prices <CLc1> fell 75 cents, or 1.02
percent, to $73.07 per barrel, as a stronger dollar made it
more expensive for investors using other currencies to buy the
commodity.
EURO WEAKENS
The dollar rose 0.1 percent against a basket of major
currencies measured by the U.S. Dollar Index <.DXY>.
The euro continued its slide, down 0.15 percent to $1.2686,
as it was hurt by concerns about the euro zone economy and
prospects of loose monetary policy for an extended period.
The number of investors betting against the euro has
increased, data from the Commodity Futures Trading Commission
showed. []
Data from UBS AG also showed a drop in net investment flows
into the euro zone for a third consecutive week.
"August's deceleration in activity (in Europe) has dented
some of the euro bulls' arguments about economic outperformance
vis-a-vis the United States and as such put a cap on any euro
rally for now," said Boris Schlossberg, director for currency
research at GFT in New York.
The Australian dollar reversed losses after being dented by
political uncertainty from an inconclusive general election.
The currency fell earlier after neither major party in
Australia won an overall majority in Saturday's election.
[]
The Aussie dollar traded as low as $0.8864 <AUD=> but it
recouped losses to trade at $0.8929, helped by buying from
real-money accounts.
U.S. Treasuries prices gave back part of a recent rally.
The 30-year U.S. Treasury bond <US30YT=RR> was down 12/32 in
price, with the yield at 3.6829 percent, as investors took
profits and made room for this week's $109 billion sale of bond
auctions.
(Additional reporting by Leah Schnurr, Burton Frierson and
Vivianne Rodrigues; Editing by Andrew Hay and Paul Simao)
