By Kate Gibson
NEW YORK (MarketWatch) -- U.S. stocks tallied mild losses on
Monday as investors took a break after a four-week winning
stretch.
"It is normal to see periodic short-term market pullbacks after
extended rallies," noted Fred Dickson, chief investment strategist
at Davidson Cos.
But, "the stock market remains reasonably valued, especially
when compared to the ultra-low interest rates seen in the bond
market," said Dickson, who calculates equities are trading at 12
times estimated 2011 S&P 500 operating earnings.
On pace for its best September performance since 1939, the Dow
Jones Industrial Average (DJI) slid 27.44 points, or 0.3%, to
10,832.82.
Twenty-one of the Dow's 30 components were lower, with Bank of
America Corp. (BAC) off the most, down 1.5%. Verizon Communications
Inc. (VZ) was the biggest gainer, up 1.1%.
The Standard & Poor's 500 Index (SPX) was off 4.47 points,
or 0.4%, to 1,144.2, with health-care shares weighing the most.
The Nasdaq Composite Index (RIXF) declined 9.69 points, or 0.4%,
to 2,371.51.
For every three stocks on the rise nearly four fell on the New
York Stock Exchange, where 383 million shares traded as of 1 p.m.
Eastern.
Wall Street's modest retreat came along with another round of
deal-making in the airline, consumer products and retail
sectors.
Southwest Airlines Co. (LUV) said it would acquire AirTran
Holdings Inc. (AAI) for about $1.4 billion. Consumer-products maker
Unilever NV (UN) agreed to purchase beauty-products maker Alberto
Culver Co. for $3.7 billion and Wal-Mart Stores Inc. (WMT) offered
to pay nearly $4.3 billion for South African distributor Massmart
Holdings Inc. (MMRTY)
Shares of M&T Bank Corp. (MTB) fell on reports the company's
merger talks with Banco Santander SA had derailed.
While the first session of the week was devoid of economic data,
reports in coming days include consumer sentiment, weekly jobless
claims, manufacturing and gross domestic product in the second
quarter.
"The markets are in rally mode and are likely to continue until
we see worse-than-expected economic data with the next major report
next Friday - unemployment," observed Paul Nolte, managing director
at Dearborn Partners.