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U.S. stock futures declined Monday after manufacturing data from New York state came in slightly below forecasts.¬†Futures were already weaker after news that Japan — the world’s third-largest economy — fell into recession, but shares of Baker Hughes Inc. look set to shine after the oil-services company agreed to a buyout.

Futures for the Dow Jones Industrial Average (DJZ4) dropped 35 points, or 0.2%, to 17,569, and those for the S&P 500 index (SPZ4) lost 5 points, or 0.3%, to 2,032.90. Nasdaq 100 futures (NDZ4) declined 8.5 points, or 0.2%, to 4,232.90.

Economic data: The Empire State manufacturing index, the first of the many regional manufacturing gauges to be released, rebounded a bit November, but is still well below September levels, indicating a downshift in activity.

Next on Monday’s docket, is the release of October industrial production figures at 9:15 a.m. Eastern.

Weakness in futures set in after official data showed Japan’s real gross domestic product shrank 1.6% in the third quarter, weighed by companies cutting inventories and subdued capital investment. Economists surveyed by The Wall Street Journal had on average been looking for the economy to expand by 2.25%.

Japanese stocks sank after the report, leaving the Nikkei Stock Average down 3%. The Japanese yen, meanwhile, slid to a seven-year low against the U.S. dollar (USDJPY), but recovered somewhat allowing the dollar buy more than Yen116. The country’s Prime Minister Shinzo Abe said he will decide on whether to move forward with a planned sales-tax increase following analysis of the situation, according to media reports Monday. Abe may also call for a snap election to be held next month.

“The stock market and currency could remain volatile until Mr. Abe confirms his intentions. There is, of course, the prospect of further economic stimulus as well,” said Richard Troue, head of investment analysis, at Hargreaves Lansdown, in a Monday note.

A pullback on Wall Street would follow a largely muted end to trading on Friday, when the S&P 500 (SPX) edged up 1 point and the Dow industrials (DJI) slipped 0.1%. The Nasdaq Composite (RIXF) rose 0.2%. The indexes last week marked a fourth week of gains.

Stocks to watch:Baker Hughes Inc.(BHI) shares bounced up 16% after Halliburton Co.(HAL)agreed to purchase its rival oil-services provider in a cash-and-stock deal valued at $34.6 billion. The deal is expected to close in the second half of 2015. Halliburton shares fell nearly 5%.

Pfizer Inc. (PFE) shares fell 1.6% ahead of the open after the drug maker and Germany’s Merck KGaA said they’ll work together to develop a new anti-cancer tumor treatment. Pfizer cut its 2014 per-share earnings view as Merck will receive $850 million upfront in the venture.

Tyson Foods Inc. (TSN) shares climbed 3.8% before the bell as the meat producer said quarterly sales rose 14%.

Botox maker Allergan Inc. (AGN) neared a deal to be acquired by Actavis PLC(ACT), according to The Wall Street Journal. The WSJ said the deal will likely be at a premium to Activis’s $59 billion market capitalization, with media reports suggesting it could be worth up to $65 billion. That would fend off Allergan’s months-long attempt to thwart a hostile $53 billion bid by Valeant Pharmaceuticals International (VRX).

Hasbro Inc.(HAS) shares picked up 2.8% in light volume premarket. Over the weekend, merger talks between the Transformers toymaker and DreamWorks Animation SKG Inc. (DWA) fell through, according to reports.

Other markets: December crude-oil futures (CLZ4) fell 1%, resuming a run of losses. European stocks were off session lows and nearly flat. Gold futures (GCX4) were higher at around $1,186 an ounce