US stocks mixed in early trade

Forty-five minutes into Tuesday trade, the Dow Jones Industrial Average was down 35.61 points (0.22 per cent) at 16,118.78.

US stocks have kicked off a holiday-shortened week in mixed fashion as investors weigh Irish drug maker Actavis's mega deal to acquire Forest Laboratories and disappointing earnings from Coca-Cola.

Forty-five minutes into Tuesday trade, the Dow Jones Industrial Average was down 35.61 points (0.22 per cent) at 16,118.78.

The tech-rich Nasdaq Composite rose 8.25 (0.19 per cent) to 3,667.12, while the S&P 500 index, a broad measure of the markets, slipped 1.81 (0.10 per cent) to 1,836.82.

"This morning's $US25 billion ($A27.77 billion) M&A deal of Irish drug-maker Actavis acquiring Forest Labs raises M&A market interest even further," said Fred Dickson of DA Davidson & Co.

"We expect a steady stream of new M&A announcements in coming months, as corporations feel pressured to commit cash sitting on the sidelines to drive future earnings."

Generic drug maker Actavis will pay $89.48 per Forest share to buy the specialty pharmaceutical firm, a premium of about 25 per cent over Forest's share price, the companies announced.

US-traded shares in Dublin-based Actavis shares surged 6.4 per cent to $204.05 and Forest Labs soared 28.8 per cent to $91.96.

Dow member Coca-Cola dropped almost 4.0 per cent after reporting fourth-quarter revenue that missed Wall Street expectations.

IPhone maker Apple rose 1.0 per cent helped by press reports it is in talks to buy electric car maker Tesla Motors. Tesla advanced 2.7 per cent.

News the developer behind the popular Candy Crush puzzle game, King Digital Entertainment, is seeking a listing on the New York Stock Exchange rippled through tech stocks.

Candy Crush is available on Facebook (-0.8 per cent) and on mobile platforms run by Apple, Google (+0.2 per cent) and Amazon (-1.3 per cent).

Bond prices rose. The yield on the 10-year US Treasury dropped to 2.69 per cent from 2.75 per cent on Friday, while the 30-year fell to 3.68 per cent from 3.70 per cent. Bond prices and yields move inversely.

Source AAP

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