By Kate Gibson
NEW YORK (MarketWatch) -- U.S. stocks fell on Monday, following
a four -week rally, as concerns over European banks weighed on the
financial sector and offset a flurry of deal-making.
The Dow Jones Industrial Average (DJI) fell 48.22 points, or
0.4%, to end at 10,812.04.
The blue-chip average remains on pace for its best September
performance since 1939.
"The stock market remains reasonably valued, especially when
compared to the ultra-low interest rates seen in the bond market,"
said Fred Dickson, chief investment strategist at Davidson Cos.,
who calculates equities are trading at 12 times estimated 2011
S&P 500 operating earnings.
Twenty-four of the Dow's 30 components were lower. Bank of
America Corp. (BAC) fell the most, down 2.7%, and AT&T Inc. (T)
led gains, up 1%.
The Standard & Poor's 500 Index (SPX) was off 6.51 points,
or 0.6%, at 1,142.16.
The Nasdaq Composite Index (RIXF) dropped 11.45 points, or 0.5%,
to end at 2,369.77.
"It is normal to see periodic short-term market pullbacks after
extended rallies," Dickson said.
Decliners topped gainers by nearly 3 to 2 on the New York Stock
Exchange, where nearly 920 million shares traded.
Wall Street's up-and-down trade came 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 7% 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," said Paul Nolte, managing director at
Dearborn Partners.