But some Ingersoll-Rand shareholders, who had expected the cash-rich company to pour some money into share repurchases, seemed disappointed with the acquisition announced Monday and sold Ingersoll-Rand stock, driving shares down sharply.

The $10.1 billion cash and stock deal — one of the largest industrial buyouts in recent years — gives Ingersoll-Rand, which makes Thermo King refrigerated trucks and Hussmann refrigerated display cases, access to Trane's building and transportation cooling systems.

———

NEW YORK — Wall Street extended last week's losses Monday as investors remained concerned about flagging growth and rising prices, and were skeptical that a special Federal Reserve credit auction will be a solution.

The Dow Jones industrial average fell more than 170 points and all the major indexes lost at least 1 percent.

Investors remained nervous even as the Fed offered $20 billion in 28-day credit through an auction Monday. The central bank will not release the results until Wednesday, but the aim of the auction is to encourage commercial banks to borrow from the Fed. That, in turn, is designed to boost banks' lending to businesses and consumers and keep the economy humming.

Last week, the Fed disappointed investors when it cut interest rates by only a quarter of a percentage point, which was less than some analysts expected. Wall Street is pleased that policy makers say they will keep trying to lift market confidence, which has dwindled since home foreclosures started soaring, but the market is so far unconvinced that the auction will be enough.

———

WASHINGTON — The U.S. trade deficit declined during the third quarter to the lowest level in two years, raising hopes that the country's trade troubles could be easing.

The Commerce Department reported Monday that the current account trade deficit fell by 5.5 percent to $178.5 billion in the July-September quarter. That was a better-than-expected showing and the smallest current account imbalance since a $173.4 billion deficit in the third quarter of 2005.

The current account is the most comprehensive measure of trade because it includes not only trade in products and services but also investment flows between countries.

The current account deficit had set all-time highs for five consecutive years but has declined for two consecutive quarters, prompting economists to predict that this year will see the deficit finally start to decline.

———

NEW YORK — Oil prices fell Monday when an OPEC official said the cartel may boost output, calming concerns about tight supplies.

"I would not exclude the possibility of increasing production if the market wants it," said Chakib Khelil, Algeria's oil minister, who takes over as president of the Organization of Petroleum Exporting Countries on Jan. 1.

Data released by oil tanker-tracker Petrologistics shows OPEC oil exports have already risen by about 400,000 barrels a day, analysts said.

As the oil supply picture is improving, concerns about weakening demand are rising. Analysts said Friday's government report that consumer inflation jumped in November by the largest amount in more than two years continues to weigh on markets.

———

NEW YORK — Wheat prices surged above $10 a bushel for the first time ever Monday amid concerns that strong demand globally could result in a grain shortage in the United States next year — worsening food price inflation.

Other commodities markets mostly declined, with energy, other agricultural futures and metals moving lower.

Wheat supplies in the U.S. have dwindled this year as one wheat crop after another around the world has been damaged by poor weather, most recently in Australia and Argentina. That has sent buyers scrambling for stockpiles at any cost. U.S. wheat exporters already have sold more than 90 percent of the 1.175 billion bushels the U.S. Department of Agriculture expects will be exported during the whole marketing year, which ends in June 2008.

Wheat prices crossing the $10 a bushel threshold won't immediately translate into a spike in retail prices for bread, cereal, cookies and other products, experts say. That due partly because companies like Kellogg Co., General Mills Inc., ConAgra Foods Inc. and Kraft Foods Inc. typically protect themselves from price volatility with long-term supply contracts. But analysts say consumers should expect that higher wheat prices will eventually work their way into the grocery aisle.

———

NEW YORK — The future of the U.S. tobacco industry came into sharper focus on Monday when Loews Corp. announced it would spin off its Lorillard cigarette subsidiary, positioning the maker of Newport, Kent and True brands to compete with rivals who are aggressively looking to replace cigarettes as a source of revenue.

As American smokers buy fewer cigarettes, tobacco companies have started to look for alternatives such as cigars, chewing tobacco and snus, which are tea bag-like tobacco pouches placed between a cheek and gums and are popular in parts of Europe. An independent Lorillard could take on debt to pursue acquisitions or develop such alternatives on its own.

A spinoff of the tobacco business could remove some legal risk and boost the market value of New York-based Loews, which is led by the Tisch family and also owns Loews Hotels, watchmaker Bulova Corp., CNA Financial Corp. and Diamond Offshore Drilling Inc. Loews shares rose 2.4 percent on Monday.

Consumers have pulled back on buying cigarettes due to health concerns, smoking bans and higher taxes.

———

WASHINGTON — A December reading of U.S. homebuilders' sentiment remained at a record low for the third straight month.

The National Association of Home Builders said Monday its housing market index, which gauges builders' perceptions of conditions and expectations for home sales over the next six months, came in at 19 in December. The number was at the lowest level since the index began in January 1985.

Index readings higher than 50 indicate positive sentiment. The seasonally adjusted index has been below 50 since May 2006, and declined for eight straight months this year, and has been unchanged since October.

Tighter lending standards, rising defaults among borrowers with weak credit and a sense of worry about the housing market's future have meant fewer buyers for hard-hit homebuilders such as D.R. Horton Inc., Pulte Homes Inc. and Centex Corp.

———

SAN FRANCISCO — Adobe Systems Inc. announced Monday that fourth-quarter profit surged 21 percent, beating Wall Street expectations thanks to record revenue after the company's biggest-ever software launch.

Net income for the three months ending Nov. 30 was $222.2 million, or 38 cents a share, compared with $183.2 million, or 30 cents per share, in the year-ago period.

Fourth-quarter sales were a record $911.2 million, up 34 percent from a year ago and easily exceeding the company's own estimates of $860 million to $890 million.

The San Jose-based software maker also announced Monday it would repurchase an additional 30 million shares for a total buyback of 50 million shares. The company, which announced the buyback in April, had repurchased 17.7 million shares through November, leaving about 587.9 million outstanding.

———

WASHINGTON — The shortfall between the promises the government has made on Social Security, Medicare and other benefit programs is $45 trillion over the next 75 years, up nearly $1 trillion in just one year, the Bush administration reported Monday.

The administration, releasing the "Financial Report of the United States Government" for 2007, said that the gap between benefits that have been promised and projected revenues is up 67.8 percent from just four years ago, when it was estimated at $26.9 trillion.