No you are not over reacting. I am mama to 14 and 8 are daughters. I would not let me DD sleep over. Tell her yes you can but not this time. You are the parent you do not need her approval. If upon further investigation you feel ok with the situation then do that but do not ignor that little voice inside of you that you are blessed with. I hope your DD has a wonderful evening.
Added-could it be that she told you because she wants you to be the one to say no? I have found that at times. this makes it easier for her to say no to her friends.