US stocks slump after Microsoft gives up Yahoo bid

US shares opened lower Monday after Microsoft walked away from its takeover offer for unwilling Internet prey Yahoo and amid profit taking from last week's gains.

In the first hour of trading, the Dow Jones industrial average fell 65.13, or 0.50 percent, to 12,993.07, while the Nasdaq composite index fell 4.55, or 0.18 percent, to 2,472.44.

On Saturday, Microsoft yanked its buyout offer for Yahoo, saying the struggling Internet pioneer refused to budge on price despite the software giant's increase in its offer to 33 dollars a share, from an initial 31 dollars on February 1.

Experts were surprised that Yahoo did not accept what was considered a generous offer and predict that its stock price, bereft of the prop of Microsoft's bid, will plunge even further.

"Microsoft did the smart thing -- they walked," Silicon Valley analyst Rob Enderle said over the weekend. "Yahoo's stock price is going to come down like a rock on Monday."

(Agencies)