Wall Street on track to open lower as U.S. shutdown enters third day

By Sruthi Shankar

(Reuters) - Wall Street was set to start the week slightly lower as a U.S. government shutdown entered its third day, while investors assessed a flurry of multi-billion corporate mergers.

The Senate is set to vote at midday on Monday, following failed attempts by Democrats and Republicans to strike a deal on Sunday to fund government operations.

"It's 'Been there, done that'. We know they are actually going to get their act together and reach a deal. But the economic impact depends on how long it lasts," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

Investors also focused on a spate of deals, particularly following the recent enactment of corporate tax cuts.

Juno Therapeutics rose about 27 percent in premarket after Celgene agreed to buy the biotech for about $9 billion in cash. Celgene was down 1.22 percent.

Shares in U.S. hemophilia specialist Bioverativ soared 63 percent after French healthcare group Sanofi agreed to buy the company for $11.6 billion.

Insurer AIG said it would buy reinsurer Validus Holdings for $5.56 billion. Validus was up 45 percent.

At 8:40 a.m. ET (1340 GMT), Dow e-minis were down 49 points, or 0.19 percent, with 23,251 contracts changing hands.

S&P 500 e-minis were down 0.75 points, or 0.03 percent, with 108,775 contracts traded.

Nasdaq 100 e-minis were down 0.25 points, or -0 percent, on volume of 27,852 contracts.

The S&P 500 and the Nasdaq notched record closing highs on Friday, as investors shrugged off the threat of a shutdown and focused on upbeat quarterly earnings.

Of the 53 S&P 500 companies that reported through Friday, 79.2 percent have topped earnings estimates, according to Thomson Reuters I/B/E/S.

Halliburton Co rose 2.24 percent on Monday after posting a much bigger-than-expected quarterly profit in the fourth quarter, benefiting from a shale-driven surge in U.S. oil production.

Shares of Netflix Inc, a major contributor to the recent stock rally, were up about 1 percent ahead of its quarterly results after market closes.

The benchmark U.S. 10-year Treasury yield was close to its highest level in more than three years on Monday.

"More concern is coming from the bond market where yields are testing a long-term resistance," said Brown. "If the yields are going up, and if earnings stay the same, share prices would come down."

The week is heavy on data. Investors will get a peek into the economy's health during the fourth quarter, with GDP growth numbers and the Fed's favored inflation measure, personal consumption expenditure, due at the end of the week.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)