Another day, another record for the price of a barrel of oil. 

Soaring crude prices combined with the failed Yahoo-Microsoft marriage and a disappointing day for AIG and General Motors to push Wall Street to a negative closing bell on very light volume.

Today's Market

The Dow Jones Industrial Average slid 88.66 points, or 0.68% to 12968.54, the Standard & Poor’s 500 index lost 6.41 points, or 0.45%, to 1407.49 and the Nasdaq Composite Index declined 12.87 points, or 0.52%, to 2464.12. The consumer-friendly Fox 50 fell 5.90 points, or 0.59%, to 1000.17.

The tech world was front and center to start off the trading week, as Yahoo (YHOO) shareholders punished the company after it failed to reach a friendly deal with software titan Microsoft (MSFT). Shares of Yahoo tumbled 14.5% Monday. On the other hand, Microsoft closed the day just slightly lower as some of its executives and shareholders weren't thrilled with the idea of acquiring a company the size of Yahoo anyway. (Click here to read more.)

The broader market was under pressure as well, with General Motors (GM) falling 3.6% after auto workers at a Kansas plant went on strike. AIG (AIG) dropped 3.4% after an analyst at Friedman, Billings, Ramsey & Co. predicted the insurer would release "messy" first-quarter results Thursday, including heavy writedowns, according to Thomson Reuters.

Volume was very light on the New York Stock Exchange on Monday, with barely over 1.1 billion shares changing hands, nearly 400 million less than on a typical trading day. 

Meanwhile, oil prices unexpectedly soared to another all-time intraday record of $120.36 a barrel. Crude, which is up more than 20% in 2008, was lifted higher on supply concerns, particularly an attack on an oil facility in Nigeria and other geopolitical issues. Crude closed up $3.65 at $119.97 a barrel -- a new record close.  

"We have a lot of guys scratching their heads today. Nobody expected this," Anthony Grisanti of GRZ Energy told FOX Business. "There is oil out there but we are continuing the upward trend…$125 could be right around the corner but higher than that I’m not sure.”

Airline stocks didn't appreciate the jump in oil prices, as the sector declined 3.5% on Monday. Shares of Continental (CAL) tumbled 5.4% and Delta (DAL) took a 4.6% hit. 

“Clearly the return to some of the commodities has taken some steam out of the equities today,” said Michael James, senior equity trader at Wedbush Morgan Securities in Los Angeles. James cited the negative effect oil prices had on retailers, which have been a moving higher in recent weeks but fell more than 1.4% on Monday. 

Worries about oil prices helped drown out a better-than-expected economic report about the nation's service sector.  The Institute of Supply Management's non-manufacturing index rebounded to 52.0  last month versus 49.6 in March. Economists surveyed by Dow Jones expected a 49.5 reading for April's service sector, which would have indicated a contraction. However, the ISM's prices paid index jumped to 72.1 in April, signaling potential inflationary troubles ahead.

GM was hit hard by a strike at a Fairfax, Kan. facility that makes its popular Malibu sedan. The strike comes just a week after GM revealed a $3.3 billion loss in the first quarter, mostly related to declining sales in North America and one-time charges. It also comes just a month after GM was hit by a strike at a Michigan plant making its crossover vehicles. 

Still, the story of the day surrounds the fallout of the failed Microsoft-Yahoo merger. Microsoft pulled its offer off the table on Saturday after its new $33 per share bid was rejected. The move was somewhat surprising as Microsoft Chief Executive Steve Ballmer had previously said he would not rule out a hostile takeover of Yahoo. Determining that such an action would be needlessly messy, Ballmer opted to let Yahoo remain independent... for the time being at least.

Given the hit Yahoo took Monday, there was some speculation on Wall Street that Microsoft could re-emerge and attempt to takeover a newly weakened Yahoo at a lower price. Software giant Oracle (ORCL) successfully followed a similar strategy after its initially failed bid to acquire BEA Systems (BEAS) in 2007. (Click here to read "Why Microsoft Should NOT Up Its Bid For Yahoo!)

Wall Street pulled back some from Friday's closing bell, which put the Dow at its highest levels of 2008. After months of gloomy economic headlines and fears surrounding the credit crisis, Wall Street rallied back, picking up 11% since March 10. Year-to-date the Dow is off 2.2%. 

Corporate Movers

Sprint Nextel (S) could be bought by Deutsche Telekom AG (DT), the parent company of U.S. wireless company T-Mobile, The Wall Street Journal reported. Shares of Sprint jumped 10.4% on the report. A combination would create the largest wireless company in the U.S., topping AT&T (T) and Verizon Wireless, which is a joint venture between Verizon (VZ) and Vodafone (VOD). However, the Journal later reported Monday that Sprint is contemplating spinning off or selling its Nextel unit, which it acquired for $35 billion in 2005 but has had little success with. 

Countrywide Financial (CFC), the nation's largest mortgage originator, tumbled 8.8% after a research firm suggested Bank of America (BAC) should walk away from its $4 billion buyout or reduce its price. Paul Miller, analyst at Friedman, BIllings, Ramsey & Co., cited the ongoing turmoil in the mortgage market as a reason why BofA will need to writedown up to $30 billion when it is expected to close its deal with Countrywide in the third quarter. Meanwhile, Fitch Ratings placed Countrywide on "ratings watch evolving," removing it from "ratings watch positive" on "uncertainty over the transaction's final structure." 

U.S. Airways' (LCC) negotiations with United Airlines parent company UAL Corp. (UAUA) have "intensified" and a deal could come to fruition within 10 days, according to a report in The Wall Street Journal. A merger could save the airlines more than $1.5 billion but could be hampered by regulatory and labor complexities, the newspaper reported. The talks come just weeks after Continental (CAL) rebuffed United Airlines' merger hopes. 

General Mills (GIS) Chairman Steve Sanger is retiring in May after 34 years with the company and will be replaced by Chief Executive Ken Powell. 

Google (GOOG) picked up 2% as shareholders and analysts believe the company will benefit from the failed Yahoo-Microsoft marriage. Goldman Sachs analyst James Mitchell reaffirmed a "buy" rating and also increased his price target to $650 from $560, according to Thomson Reuters.  

Time Warner's (TWX) struggling AOL business could find itself a winner in the Yahoo-Microsoft fallout. The company has been rumored to be a potential target of both Yahoo and Microsoft as a way to bolster their online presence. 

Apple (AAPL) rose 1.3% and hit its highest level since Jan. 4 after an analyst at American Technology Research upgraded the stock to "buy" from "neutral" and upped his price target to $210, according to Thomson Reuters. Shawn Wu, the analyst, had cut the stock to "neutral" just over two weeks ago, citing "high expectation" for the Apple's earnings, which it subsequently topped. 

UBS (UBS) could lay off as many as 8,000 employees as it continues to deal with the subprime debacle and ongoing credit crisis, according to a Bloomberg News report. The largest Swiss bank is likely to cut 2,500 to 3,000 jobs from its investment bank, or 10% of its division, the news agency reported. 

Zoltek (ZOLT) dropped 8.5% on accounting errors and the resignation of Chief Financial Officer Kevin Schott. The materials supplier hit a 52-week low after it said its audit committee found errors amid two unauthorized or unreported payments. Zoltek said its statements from the fiscal year ending Sept. 30, 2007 and quarter ending Dec. 31, 2007 should no longer be relied upon. 

World Markets

The Dow Jones Euro 50, the 50 largest companies of Europe, fell 5.35 points, or 0.14%, to 3872.15. France's CAC 40 Index lost 6.35 points, or 0.13%, to 5063.36 and Germany's DAX picked up 8.85 points, or 0.13%, to 7052.08.

In Asia, Hong Kong's Hang Seng Index fell 57.07 points, or 0.22%, to 26183.95.