Stocks are showing notable weakness during mid-morning trading on Monday, as investors take profits from last week's gains and respond to some mixed corporate news. The reported collapse of merger talks between IBM (IBM) and Sun Microsystems (JAVA) has helped to drive stocks lower.

Sun Microsystems is suffering considerable weakness during morning trading after media reports said that acquisition talks between IBM and Sun have collapsed, putting the deal at risk of failure.

The reports said that Sun's board rejected a formal acquisition offer by IBM on Saturday, sending a notice terminating Sun's deal to hold talks exclusively with IBM. In response, IBM reportedly withdrew its offer to acquire Sun on Sunday.

Some of the weakness in the markets also comes in reaction to negative comments from veteran banking analyst Mike Mayo, who recently left Deutsche Bank AG to join Calyon Securities.

Mayo initiated coverage of several banks with either Sell or Underperform ratings, citing concerns about increased loan losses and the belief that government actions might not help as much as expected.

After a failed recovery attempt, the major averages have moved back to the downside in recent trading, falling to new lows for the session. The Dow is currently down 104.90 at 7,912.69, the Nasdaq is down 35.48 at 1,586.39 and the S&P 500 is down 14.87 at 827.63.

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