U.S. stocks fell Monday despite acquisition offers from companies including Hewlett-Packard as investors remained concerned about broad economic weakness. The Dow Jones Industrial Average declined 39.21 points, or 0.38%, to 10174.41, its third straight session in the red.

Caterpillar was the measure's worst performer, off 2.02, or 2.9%, to 66.84. Among the Dow's other weak performers, Cisco declined 55 cents, or 2.5%, to 21.68, and H-P slipped 81 cents, or 2%, to 39.04.

H-P's decline came as the technology giant launched a bidding war for small capitalization stock 3PAR, making a $1.6 billion bid for the data storage company that tops an earlier offer from Dell. Dell, which isn't a Dow component, declined 13 cents, or 1.1%, to 11.94.

The Nasdaq Composite dropped 20.13, or 0.92%, to 2159.63, and the Standard & Poor's 500 index fell 4.33, or 0.40%, to 1067.36. Stocks had gained earlier in the session as the market initially took increased deal activity as a sign that companies are getting more confident to use their cash.

However, as they mulled it over, investors reached the conclusion an increase in mergers and acquisitions won't necessarily alleviate the concerns of high unemployment and sluggish consumer spending. The deal activity could even add to the economic weakness as companies tend to follow mergers with layoffs.

European market

European stocks rose Monday, with most sectors trading in positive territory, as miners gained on relief over Australia's elections and financials advanced on deal news involving HSBC Holdings and Old Mutual.

The Stoxx Europe 600 index added 0.6% to 253.76. Among the main regional European benchmarks, the U.K.'s FTSE 100 index closed 0.8% higher at 5,234.84 and the French CAC-40 index rose 0.8% to 3,553.23. The German DAX index inched 0.1% higher to 6,010.91.

Financial stocks were top gainers, with deal news driving the sector. Shares of Old Mutual PLC rose 3.2% after HSBC Holdings said it's in talks to acquire a majority stake in Nedbank Group, which is owned by the insurer. Shares of HSBC rose 0.8%. Among other insurers, shares of Aviva PLC gained 3.6%.

Asian market

Asian stock markets ended mixed Monday with property stocks in China taking a hit again as the Chinese government over the weekend re-emphasized the need to curb property speculation. Japan's Nikkei Stock Average ended 0.7% lower, South Korea's Kospi declined 0.4%, China's Shanghai Composite dipped 0.1% and Hong Kong's Hang Seng Index was down 0.4%.

Real estate firms on the mainland were again dragged lower after the nation's Vice Premier Li Keqiang Saturday reiterated that the government must continue to crack down on property speculation to rein in housing prices, which have remained stubbornly high, as they are a threat to both the economy and social stability.

Li also urged local governments to boost the supply of cheap public housing. China Vanke fell 1.9%, while Poly Real Estate Group was 1.5% lower.

Japanese shares declined after Japanese Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa appeared to make little progress on tackling the weak economy in what had been an eagerly anticipated discussion. Exporters were broadly weak in Tokyo, with Tokyo Electron down 2.5% while Sony fell 1.5%.

Commodities and metals

Base metals ended mostly lower on the London Metal Exchange Monday in a choppy session with little clear direction. Worries of slowing growth and a sluggish performance in equity markets kept trading activity to a minimum. U.S. existing home sales and German second quarter gross domestic product data will be released Tuesday.

The metals traded in narrow ranges on either side of Friday's closes. Copper ended 0.04% higher after trading in a range of less than $70.

Summer holidays in Europe have thinned the ranks of market participants, and traders said they were waiting until September for the market to return to normalcy and find a clearer direction.

Crude futures settled lower Monday as concerns about demand coupled with rising inventories, particularly of gasoline, pushed prices near $73 a barrel.

Light, sweet crude for October delivery settled 72 cents, or 1%, lower at $73.10 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled down 64 cents at $73.62 a barrel.

Gasoline led the declines among petroleum products. Futures settled at 10 month lows as record-high inventories persist, even with the important summer driving period nearly over.

Gold futures were steady near seven week highs as participants remained on edge about the sustainability of the economic recovery but didn't want to purchase new positions ahead of economic data later in the week.

With little fresh news to drive the metal higher after rising last week on disappointing economic figures, the most actively traded December contract fell 30 cents, or 0.02%, to settle at $1,228.50 an ounce on the Comex division of the New York Mercantile Exchange.