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US stocks drop; Charter announces $78.7bn cable deal

New York - Wall Street stocks fell in early trade on Tuesday following a decline in US durable goods orders and news of Charter Communication's $78.7bn deal for Time Warner Cable.

About 25 minutes into trade, the Dow Jones Industrial Average stood at 18 101.56, down 130.46 points (0.72%).

The broad-based S&P 500 fell 13.57 (0.64%) to 2 112.49, while the tech-rich Nasdaq Composite Index shed 40.21 (0.79%) to 5 049.15.

Orders for US durable goods fell 0.5% last month due mainly to a drop in orders in the volatile transport sector. But orders for machinery and other non-defence-related capital good were strong, rising 1% in the month.

Other economic releases this week include the Conference Board's report on May consumer confidence and the second estimate of first-quarter economic growth.

Time Warner Cable jumped 3.9% following Charter's announcement to create a cable giant. The move comes after Comcast in April withdrew a bid for Time Warner Cable in the wake of opposition from antitrust regulators. Charter dipped 0.4%.

Auto parts company AutoZone added 0.3% after it reported that net income for the quarter ending May 9 rose 8.4% $309.1m.

First Solar fell 6.3% after RBC Capital Markets downgraded the stock, saying competitors have caught up with its low-cost modules.

Markets were closed Monday in observance of the Memorial Day holiday.

Bond prices rose. The yield on the 10-year US Treasury dropped to 2.20% from 2.21% Friday, while the 30-year fell to 2.95% from 2.99%. Bond prices and yields move inversely.

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