US stocks fall despite giant Heinz, airline deals

US stocks traded lower in early action Thursday despite two giant M&A deals, the merger of American Airlines and US Airways, and Berkshire Hathaway and 3G's takeover of ketchup maker Heinz.

Analysts said the markets were partly echoing the slump in European markets on dismal economic growth reports from eurozone countries, as well as Japan.

One hour into trade, the Dow Jones Industrial Average was down 16.28 points (0.12 percent) at 13,966.63.

The broad-based S&P 500 dropped 1.27 (0.08 percent) to 1,519.06, while the tech-rich Nasdaq Composite lost 7.97 points (0.25 percent) to 3,188.91.

US Airways shares fell 4.0 percent after the official announcement of its long-awaited merger with American Airlines, creating the largest US carrier. American parent AMR Corp, under bankruptcy reorganization, jumped 48 percent.

Heinz shares, however, soared nearly 20 percent to $72.50 after the shock announcement that billionaire Warren Buffett's investment firm would partner with 3G Capital to buy Heinz in a deal worth $28 billion.

Berkshire Hathaway and 3G said they would offer shareholders $72.50 a share.

Shares of Belgian-US giant Anheuser-Busch InBev, whose $20.1 billion takeover of Mexican brewer Grupo Modelo has been challenged by US antitrust regulators, jumped 6.0 percent after the two companies said they would divest specific Modelo assets to please the regulators.

Distributor Constellation Brands, the main beneficiary of the divestments, was up 36 percent.

Bond prices were mixed. The yield on the 10-year US Treasury rose to 2.03 percent from 2.02 percent Wednesday, while the 30-year fell to 3.21 percent from 3.22 percent. Bond prices and yields move inversely.