Dow edges down as 4-week rally loses steam

NEW YORK (AP) – Stocks took a pause Monday from their big September rally as worries about the financial sector offset excitement over a fresh round of corporate dealmaking.

The Dow Jones industrial average fell 48.22, or 0.4 percent, to close at 10,812.04.

The Standard & Poor’s 500 index dropped 6.51, or 0.6 percent, to 1,142.16, while the Nasdaq composite index fell 11.45, or 0.5 percent, to 2,369.77.

The Dow Jones industrial average lost 48 points in a late-day slide, but it’s still up 8 percent for the month, putting it on track for its best September since 1939.

Chip Bryan, CEO of SmarTrend, an electronic trend trading system, said Monday’s modest decline was largely tied to investors pocketing profits racked up during the market’s four-week rally.

Prior to Monday the Dow Jones industrial average had risen in each of the past four weeks, its longest winning streak since eight consecutive weekly gains ended in late April when stocks hit their highest levels of the year.

“The September rally has been surprisingly resilient,” Bryan said. But investors might be ready to put the brakes on the run-up so they can wait to see what happens during earnings season, which kicks off next week, Bryan said.

Financial stocks mostly dipped as concern remains about the health of Europe’s banking sector. Moody’s Investors Service cut its rating on Anglo Irish Bank Corp., one of Europe’s more troubled banks in recent months. Global banking giants like Barclays Plc and JPMorgan Chase & Co. each fell more than one percent.

With no major economic reports to drive trading, investors focused on individual stocks after major deals in the airline, consumer products and retailing industries.

In deal news, consumer products giant Unilever NV agreed to buy beauty products maker Alberto Culver Co. for $3.7 billion. Southwest Airlines Co. will purchase AirTran Holdings Inc. for about $1.4 billion. Wal-Mart Stores Inc. proposed to buy South African consumer goods distributor Massmart Holdings Ltd. for about $4.25 billion.