NEW YORK, Feb. 26 -- Wall Street extended its decline Monday as concerns about a market correction offset investor optimism that acquisition activity is on pace to set a record this year.

The Dow Jones industrial average fell 15.22, or 0.12 percent, to 12,632.26. The Standard & Poor's 500-stock index was down 1.82, or 0.13 percent, at 1449.37, and the Nasdaq composite index fell 10.58, or 0.42 percent, to 2504.52.

The $45 billion buyout of electric utility TXU gave investors confidence that mergers and acquisitions could surpass last year's record $4 trillion. The TXU deal, involving a consortium led by Kohlberg Kravis Roberts and Texas Pacific Group, would be the largest leveraged buyout in U.S. history.

Other deals involved Station Casinos, which agreed to be bought by a private-equity firm started by the company's founding family. Temple-Inland, a conglomerate dealing in businesses as diverse as packaging material and financial services, plans to split into three standalone public companies.

However, stocks were unable to sustain gains because of speculation that the market may be in for a correction.

MoversTXUrose $7.91, to $67.93, after it agreed to be bought by private-equity firms for $32 billion plus the assumption of $13 billion of debt.

Station Casinosgained $3.20, to $86.50, after it agreed to go private in a $5.4 billion deal that allows it to solicit acquisition proposals from third parties for 30 days.

Temple-Inlandclimbed $7.06, to $62.01, after it agreed to spin off its real estate and financial services arms and sell its timberland business. The decision came days after activist shareholder Carl Icahn said he would wage a proxy fight to seize control of the board.

Dow Chemicalspiked $1.54, to $44.99, on speculation that it could be the target of a leveraged buyout. London's Sunday Express newspaper, in an unsourced report, said Dow might be offered about $54 billion by buyout funds.

NovaStar Financialfell 52 cents, to $7.96. NovaStar, one of the nation's biggest lenders to the subprime market, was hurt by speculation that customers might default.