U.S. stocks were mainly lower Monday, as worries mounted over the health of the euro zone economy and deal activity weighed on the Dow Jones Industrial Average.

The Dow fell 36 points, or 0.3%, to 11639, putting it on track for its third consecutive decline.

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Weighing on the measure, DuPont fell 2% after the company agreed to acquire Denmark's Danisco, an enzyme and specialty food ingredients company, in a $6.3 billion deal.

DuPont will pay $5.8 billion in cash and assume $500 million of Danisco net debt.

Among the Dow's handful of gainers, Alcoa rose 0.6% ahead of its fourth quarter earnings report after the market closes Monday afternoon.

The Nasdaq Composite edged up less than one point to 2704.

The Standard & Poor's 500-stock index shed 0.2% to 1270.

Telecommunications stocks led the S&P 500 lower in the wake of confirmation over the weekend that Verizon Wireless will officially announce Tuesday that it will carry Apple's iPhone, which initially had been available only on the AT&T network.

Sprint Nextel sank 4.9% and AT&T shed 1.7%, while shares of Verizon Communications edged up 0.1%.

Investors said Monday's pullback was a natural reaction after the market's climb in the last quarter of 2010 stretched into last week.

Portfolio managers also are waiting for earnings reports to revise their outlooks and see which sectors are poised to do well in the new year.

With no U.S. economic data on Monday, many market watchers focused on Europe.

The euro touched a four month low against the dollar after German media reported over the weekend that France and Germany were pressuring Portugal to accept an Ireland type bailout package from the International Monetary Fund and the European Union.

Officials in Germany and France denied the report, but fears grew that Portugal and Spain could follow Greece and Ireland in requesting financial aid from international lenders.

European Markets

European stocks slumped Monday, with banks under pressure and sovereign-debt concerns in the spotlight as market speculation intensified that Portugal will be forced to take a bailout.

The Stoxx Europe 600 index closed down 0.9% at 278.48, after gaining 1.9% last week.

Investors rushed to sell Portuguese equities after weekend media reports indicated that France and Germany are pressuring Lisbon to take a bailout.

The Portuguese and German governments have reportedly denied the stories.

In Lisbon, the PSI 20 index sank 1.6% to 7,285.87, led lower by banks.

Shares of Banco Espirito Santo tumbled 5.9% and those of Banco Comercial Portugues fell 3.2%.

French banks also sold off sharply, weighing on the CAC 40 index which lost 1.6% to 3,802.03. Credit Agricole SA fell 2.9% and Societe Generale SA dropped 3.8%.

Insurer AXA SA slipped 3.4%.

In Spain, the IBEX 35 index fell 1.3%, with shares of Banco Santander SA down 2.7% and BBVA SA off 2.3%.

In Milan, the FTSE MIB index slipped 2.4%, as shares of banking group Intesa Sanpaolo SpA fell nearly 6%.

The German DAX 30 index fell 1.3% to 6,857.06, with shares of Commerzbank AG down 1.8%.

Losses were less dramatic in London, where the FTSE 100 index fell 0.5% to 5,956.30, as shares of BP PLC weighed on the downside.

BP dropped 1.3% after a leak was discovered over the weekend at the Trans-Alaska Pipeline network.

The leak forced BP to shut down 95% of its production at what is the biggest field in North America.

Asian Markets

Asian equity markets traded mostly lower Monday, as concerns about inflation combined with weak cues from the U.S. prompted a sell off, with Indonesian, Chinese, Thai and Indian stocks dropping sharply.

Investor sentiment was hit by a disappointing U.S. jobs report Friday which dragged on Wall Street stocks.

December's nonfarm payrolls rose by 103,000 jobs as private sector employers added 113,000 jobs, missing economists' estimate for a gain of 150,000 jobs.

China's Shanghai Composite dropped 1.7%, Hong Kong's Hang Seng Index shed 0.7% and South Korea's Kospi slipped 0.3%.

Indonesian shares skidded 4.2% and Thailand's SET index dropped 1.8%.

In China, property developers declined on concerns about further tightening in the sector after a Xinhua report Sunday said the Chongqing government will begin collecting a real estate tax on high end residential property in the city before the end of March, which would make it the first Chinese city to implement such a tax.

On the mainland, Poly Real Estate Group declined 3.0% and Gemdale dropped 2.0%, while China Vanke shed 1.7%, all three erasing early gains.

In Hong Kong, China Resources Land fell 3.0% and Shimao Property Holdings shed 2.0%.

Selling by foreign funds spurred stocks in Thailand, India and Indonesia to extend losses amid concerns the countries' central banks might soon raise interest rates to cool consumer-price inflation.

In Bangkok, Siam Commercial Bank fell 2.9% and PTT lost 1.2%, while in Jakarta, Bank Mandiri dropped 6.3% and Bank Rakyat Indonesia slid 5.1%.

Base Metals

Base metals closed lower on the London Metal Exchange Monday, as subdued interest in Asia ahead of the Chinese New Year and a relatively strong U.S. dollar weighed on prices.

LME three-month copper closed in negative territory for the fifth consecutive day, down 1% at $9,321 a metric ton at the PM kerb close.

The red metal hasn't had a losing streak of this length since June 2010, when it slid from $7,000/ton to $6,101/ton in six trading days.

The run-up to the start of the Chinese lunar year, which falls Feb. 3, is traditionally a quiet time for base metal interest in the region as investors wind down for the holiday season.

China is the biggest buyer of metals globally.

Crude futures rose Monday following the closure of the Trans-Alaska Pipeline, a major route for oil delivery, igniting some fears about falling supplies.

Saturday, Alyeska Pipeline Co., which operates the 800-mile pipeline network, turned off the pipeline after workers discovered a leak.

The closure forced BP PLC (BP.LN), Exxon Mobil Corp. (XOM) and others to shut down nearly all of their oil production on Alaska's North slope, an area that produces 630,000 barrels a day about 9% of total domestic U.S. output and is relied upon by U.S. West Coast refineries.

The shutdown initially sent oil futures up nearly $2 to $89.98 a barrel on the New York Mercantile Exchange, but futures subsequently retreated, with light, sweet crude for February delivery settling $1.22 higher at $89.25 a barrel.

Gold futures rose slightly as investors wanted a hedge against shaky euro-zone finances.

The most actively traded contract, for February delivery, rose $5.20, or 0.4%, to settle at $1,374.10 a troy ounce on the Comex division of the New York Mercantile Exchange.

Thinly traded nearby gold also gained $5.20 to $1,373.70.

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