Stocks mostly down as traders look to earnings

NEW YORK -- Stocks closed broadly lower Monday in the final trading session before first-quarter earnings season gets under way.

Traders are concerned about the effect of higher oil and food costs on corporate margins. Stocks turned lower in afternoon trading after the International Monetary Fund said that higher gas prices could slow the pace of the U.S. economy and offset the boost from the Federal Reserve's bond-buying stimulus program.

After the market closed, Alcoa Inc. reported a first-quarter profit on higher aluminum prices and sales, partially offset by a weaker dollar and higher energy and raw materials costs. The results fell short of expectations. Alcoa is traditionally the first of the 30 companies that make up the Dow average to report earnings each quarter.

-- The Dow Jones industrial average rose 1.06, less than 0.1 percent, to 12,381.11.

--The S&P 500 index fell 3.71, or 0.3 percent, to 1,324.46.

--The Nasdaq composite fell 8.91, or 0.3 percent, to 2,771.51.

Level 3 to acquire rival Global Crossing for $2B

WASHINGTON -- Level 3 Communications Inc. said Monday that it is buying Global Crossing Ltd. for $2 billion, joining two major long-distance telecommunications networks that carry massive amounts of Internet and other data traffic in the U.S. and internationally.

Both Level 3 and Global Crossing operate vast networks of optical fiber used by other telecom carriers, corporations and government agencies. The combined company's reach would extend to 70 countries on three continents.

Despite steadily increasing data traffic, the prices Level 3 and companies like it can charge for carrying that traffic have been driven down by competition, said Erik Kreifeldt, a senior analyst at TeleGeography. Meanwhile, the carriers have high fixed costs, including the cost to lay fiber-optic cables on the bottom of the ocean.

Kreifeldt said the acquisition will help Level 3 gain scale, enabling it to put more traffic over its networks.

Kindle price to drop, but ads will go on devices

SAN FRANCISCO -- Inc. is dropping the price on its Kindle e-reader, but the change comes with a trade-off: On-screen ads.

The online retailer was set to announce today that the new Kindle with Special Offers will cost $114 -- $25 less than the currently lowest-priced Kindle -- and include advertisements on the bottom of the device's home page and on its screen savers. Amazon will start shipping the newest Kindle on May 3, and it also will be sold in Target and Best Buy stores on that date.

Amazon has consistently lowered the price of the Kindle since it released the first version of the device at $399 in 2007, though this is the first time it is doing so while including ads on the e-reader.

Bid for NYSE's owner rejected without talks

NEW YORK -- Nasdaq and IntercontinentalExchange said their $11.3 billion bid for NYSE Euronext was rejected without any talks with the exchanges.

Nasdaq OMX Group Inc. CEO Robert Greifeld said in a statement that feedback from NYSE Euronext shareholders was positive, and that the companies had expected NYSE Euronext would meet to discuss the merits of the proposal.

NYSE Euronext said Sunday that its board decided to turn down the offer, because it was "highly conditional."

Georgia's Flowers Foods buys Tastykakes maker

PHILADELPHIA -- A Georgia food company announced a $34.4 million cash deal Monday to acquire Tasty Baking Co., the iconic maker of Tastykakes and other packaged sweets.

Flowers Foods Inc., which makes breads, buns, rolls, snack cakes, pastries, and tortillas, is paying $4 a share. The companies say the deal is worth $165 million.

The boards of both companies have unanimously approved the deal, which is expected to close in the second quarter.