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US close: Wall Street driven lower

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Date: Tuesday 06 May 2008

LONDON (ShareCast) - Wall Street closed lower as crude hit another record high of over $120 a barrel and Microsoft walked away from its Yahoo bid.

The Dow Jones fell 88 points to 12,969, the S&P dropped 6 points to 1,407 while the tech laced Nasdaq slid 12 to 2,464.

Rumours also circulated Monday that Bank of America may renegotiate or walk away from its deal to buy Countrywide Financial fuelling concern about the health of the US economy.

Microsoft announced on Saturday that it was pulling out of its deal to takeover Yahoo and that it will not pursue a hostile takeover. A raft of tech stocks came under pressure Monday. Shares in Yahoo fell sharply while Microsoft edged lower.

Shares of Google were boosted by broker action when Goldman Sachs increased its price target on the stock. The broker explained Google could benefit from the collapse of the Microsoft-Yahoo deal.

Shares in car giant General Motors fell over 3% on news that workers at its plant in Kansas went on strike.

The weaker dollar also hampered market sentiment Monday while trading was thinner than usual with markets in London and Tokyo closed for a public holiday.