Wall Street seen lower after Microsoft drops Yahoo bid : US Business

FRANKFURT (Reuters) - Stock index futures pointed to a weaker opening on Monday on Wall Street with Yahoo Inc in focus after Microsoft Corp walked away from its $47.5 billion bid for the Internet company.

At 4:57 a.m. EDT (0857 GMT), Dow Jones futures were down 0.3 percent, S&P 500 futures were down 0.4 percent and Nasdaq futures traded 0.4 percent lower.

Microsoft on Saturday sweetened its initial $31-per-share offer for Yahoo to $33, but then withdrew from the talks when Yahoo Chief Executive Jerry Yang dug in for a price of $37.

Yahoo shares fell 18.4 percent in Frankfurt at 14.78 euros at 4: 58 a.m. EDT (0858 GMT), while Microsoft rose 4.1 percent.

Yahoo shares closed at $28.67 on Friday on Wall Street.

"Yang is certainly under a lot of pressure now," said Roland Hirschmueller, an equities trader at German brokerage Baader. "His days are numbered, if he doesn't manage to come with an alternative strategy," he added.

Google could be the big winner from the end of Microsoft-Yahoo talks as sources familiar with the matter said Yahoo was likely to push for an advertising partnership with Web search leader Google. A tie-up with Google should help boost Yahoo's operating performance in the near term.

Google shares rose 2.4 percent in Frankfurt on Monday.

Yahoo is also still considering a deal with another Internet media and advertising major, such as Time Warner Inc's AOL, people familiar with the discussions said.

Later on in the session, at 1400 GMT, the Institute for Supply Management is due to release its April non-manufacturing index. Economists in a Reuters survey forecast a PMI reading of 49.1 versus 49.6 in March.

On Friday, U.S. stocks made modest gains after jobs data that offered fresh evidence the economic slowdown is not as severe as feared, but technology shares faded on a surprise loss from Sun Microsystems Inc .

The Dow Jones industrial average <.DJI> ended the session up 0.37 percent, the Standard & Poor's 500 Index <.SPX> up 0.32 percent and the Nasdaq Composite Index <.IXIC> down 0.15 percent. (Reporting by Eva Kuehnen)

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