The Dow Jones Industrial Average was down 18.37 points (0.14 per cent) at 12,724.82 just after Wall Street opened for trading after closing higher on Friday.

The tech-rich Nasdaq composite fell 2.87 points (0.12 per cent) to 2,410.49 while the broad-market Standard & Poor's 500 index lost 2.81 points (0.20 per cent) to 1,392.61.

The White House budget proposal forecasts hefty spending deficits, but includes an economic stimulus which many investors are keen to see approved amid mounting fears that the economy is falling into a recession.

The economic stimulus is valued at 145 billion dollars (S$205 billion)in the budget proposal, but congressional lawmakers are haggling over its components. The stimulus has to be approved by Congress.

Internet giant Google meanwhile said over the weekend that Microsoft's 44.6-billion-dollar takeover (S$63.1 billion) bid for Yahoo, announced on Friday, raises questions about Internet 'openness and innovation'.

Microsoft Monday said it's bid for Yahoo was 'generous'. -- AFP