YAHOO [BRIEFING.COM]: Market participants showed caution amid a looming monthly jobs report. Their unwillingness to step in and provide support left the major averages to a gradually descend to another deep loss.

Stocks failed to pick up where they left off last week. There were no notable earnings announcements, but merger and acquisition activity continues in the face of economic uncertainty. Among those in the headlines, Intel (INTC 17.96, -0.41) announced plans to acquire the wireless unit Infineon Technologies for $1.4 billion in cash.

Meanwhile, drug maker Sanofi-Aventis (SNY 28.63, -0.29) offered $18.5 billion in cash to acquire Genzyme (GENZ 69.91, +2.29). Genzyme immediately rejected the offer as inadequate.

The bidding battle between Hewlett-Packard (HPQ 38.56, +0.56) and Dell (DELL 12.02, +0.13) for 3Par (PAR 31.82, -0.64) took turn over the weekend as 3Par deemed HP's bid of $30 per share superior to the offer of $27 per share that it had already accepted from Dell.

Dow component 3M (MMM 79.65, -1.35) will pay for $430 million, or $10.50 for each share of Cogent (COGT 11.09, +2.18).

Though M&A activity is typically regarded as a bullish sign, buyers weren't inspired.

Today's data also failed to motivate. Personal income for July increased 0.2%, as had been expected by economists surveyed by Briefing.com. Spending for the month increased 0.4%, which was a bit better than the 0.3% increase that had been anticipated, but core personal consumption expenditures (PCE) increased just 0.1% month-over month, as expected.

Barring any big surprises, most data in coming sessions will also be met with a muted response since many are likely to remain on the sidelines ahead of the always-pivotal monthly payrolls report, the latest of which is due this coming Friday. Many are looking to corporate hiring as a clue about business and consumer health.

Uncertainty ahead of the report kept many participants on the sidelines, such that trading volume on the NYSE barely broke 800 million shares, which marks one of the thinnest sessions this year. Those that did trade took the opportunity to pare their positions. That left the stock market to gradually grind its way lower. Sharp, broad-based losses almost completely unwound the strong gains of this past Friday.

Pressure was most pronounced among financial stocks, which slumped 2.2%. Banking plays were especially weak. As such, the KBW Bank Index dropped 2.7% so that it is back to within a couple of points of its 2010 low.

Amid the stock market's slide, the Volatility Index, often euphemistically dubbed the "Fear Gauge," spiked 11%.

Treasuries found favor as a result of heightened volatility and sharp losses. Specifically, the benchmark 10-year Note climbed a full point so that its yield dropped back toward 2.53%.

The dollar garnered some support, such that it advanced 0.3% against a basket of competing currencies. Most of its move came because of a 0.8% loss in the euro, but the impact of that slide was tempered by a 0.8% gain in the yen, which advanced after Japan's central bank failed to intervene in the currency. Instead, Japan's central bank used an emergency meeting to increase credit to banks.

It was a somewhat uneventful session for commodities today, with only natural gas futures making a decisive move higher. As a whole, the energy sector gained 0.3% while precious metals closed unchanged on the day.

Oct natural gas futures closed higher by 3% to $3.82 per MMBtu, rallying following last week's ~11% sell off. Short covering and forecasts for warmer-than-usual temperatures in the Northeast pushed prices higher today. Meanwhile, Oct crude finished quietly lower at $74.70, off 0.6%.

It was a quiet session for Dec gold, which ended up 0.1% to $1239.00 per ounce, and Sept silver, which shed -0.1% to close at $19.03 per ounce.

Advancing Sectors: (None)
Declining Sectors: Financials (-2.2%), Industrials (-1.6%), Consumer Discretionary (-1.8%), Energy (-1.6%), Utilities (-1.4%), Materials (-1.4%), Tech (-1.2%), Telecom (-1.2%), Health Care (-1.1%), Consumer Staples (-0.9%)DJ30 -140.92 NASDAQ -33.66 NQ100 -1.1% R2K -2.4% SP400 -1.8% SP500 -15.67 NASDAQ Adv/Vol/Dec 530/1.61 bln/2088 NYSE Adv/Vol/Dec 668/817 mln/2317