* AstraZeneca rejects sweetened Pfizer offer
* AT&T to buy DirecTV for $48.5 billion
* Futures off: Dow 42 pts, S&P 4 pts, Nasdaq 6.5 pts
(Adds Campbell Soup earnings, updates prices)
By Chuck Mikolajczak
NEW YORK, May 19 U.S. stocks were set to dip at
the open on Monday, on the heels of back-to-back weekly declines
for the S&P 500 as investors grew cautious over stock valuations
with indexes near record levels amid mixed economic data.
* U.S. listed shares of AstraZeneca slumped
8.8 percent to $73.20 in premarket trade after the British
drugmaker rejected a sweetened and "final" merger offer from
Pfizer which would have created the world's largest
pharmaceuticals group. Pfizer shares advanced 1.7 percent to
$29.60 before the opening bell.
* AT&T lost 2.5 percent to $35.83 in premarket trade
after the telecom company said it will acquire DirecTV
for $48.5 billion, highlighting AT&T's pressing need for fresh
avenues of growth beyond the maturing U.S. cellular business.
DirecTV shares lost one cent at $86.17 in premarket.
* Equities have come under pressure recently, with
consecutive weekly declines for the first time since January as
investors have become leery of growth prospects as a result of
mixed economic data.
* Small-cap stocks, often seen as the first beneficiary of
growth, have tumbled. The small-cap Russell 2000 index
has several times approached correction territory, defined as a
decline of 10 percent from a recent high, only to bounce back
* The defensive posture by investors has been reflected by a
sector rotation into groups such as utilities, telecoms and
energy, which have outperformed the broader S&P 500 over the
past three months.
* S&P 500 e-mini futures lost 4 points and were
slightly below fair value, a formula that evaluates pricing by
taking into account interest rates, dividends and time to
expiration on the contract. Dow Jones industrial average e-mini
futures declined 42 points and Nasdaq 100 e-mini futures
lost 6.5 points.
* Campbell Soup Co fell 4.8 percent to $42.95 in
premarket after the world's largest soup maker posted
weaker-than-expected quarterly sales and cut its full-year sales
* Earnings season will effectively draw to a close this
week, with 23 companies scheduled to report, including retailers
Home Depot and Lowe's Cos.
* Of the 464 companies in the S&P 500 that have reported
earnings through Friday, 69.2 percent beat expectations, above
the long-term average of 63 percent and the 66 percent average
over the past four quarters.
(Editing by Bernadette Baum)