Wall St to dip at open as Japan falls into recession

By Rodrigo Campos

NEW YORK (Reuters) - U.S. stocks were set to fall at the open on Monday, following four consecutive weeks of gains for major Wall Street indexes, weighed by data showing Japan slipped into recession.

Merger and acquisition news partly offset the declines as Halliburton said it would buy Baker Hughes and Allergan is close to a buyout by Actavis.

Japan's economy unexpectedly slipped into recession in the third quarter, setting the stage for Prime Minister Shinzo Abe to delay an unpopular sales tax hike and call a snap election two years before he has to go to the polls.

"Japan took the markets by surprise and it is weighing, but I don't see a major reversal, just a market consolidating," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

"Earnings are out of the way, so it's all about prospects for the global economy."

Leaders from the G20 group of nations agreed on Sunday to boost flagging global growth, tackle climate change and crack down on tax avoidance.

S&P 500 e-mini futures were down 4 points and fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract, indicated a lower open. Dow Jones industrial average e-mini futures fell 25 points and Nasdaq 100 e-mini futures lost 5 points.

The Japanese data took crude futures prices lower, with Brent off 1.2 percent at $78.44 per barrel. Brent futures prices have fallen in the last eight weeks and are down nearly 30 percent from June.

The energy sector on the S&P 500 was seen falling only slightly, however, as Baker Hughes rose 14 percent on news Halliburton would acquire it in a cash and stock transaction of about $34.6 billion. Halliburton shares fell 6.4 percent in premarket trading.

Allergan added 4.2 percent as the Actavis buyout values the company as high as $65.5 billion.

Negotiations between Hasbro and DreamWorks Animation have been hampered by issues regarding the structure of the combined company, according to a person familiar with the matter. DreamWorks shares fell 12.1 percent.

Manufacturing activity in New York state rose in November, bouncing back from October's weak report, the New York Federal Reserve said.

(Reporting by Rodrigo Campos; Editing by Bernadette Baum and Nick Zieminski)