Stocks pull back after four-week rally

NEW YORK - Stocks fell on Monday, following a four-week rally, despite a flurry of dealmaking.

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

The blue-chip average still 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 that equities are trading at 12 times estimated 2011 Standard & Poor's 500 operating earnings.

Twenty-four of the Dow's 30 components were lower Monday. Bank of America Corp. fell the most, down 2.7 percent, and AT&T Inc. led gains, up 1 percent.

The S&P 500 index was off 6.51 points, or 0.6 percent, at 1,142.16.

The Nasdaq composite index dropped 11.45 points, or 0.5 percent, to end at 2,369.77.

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 amid a round of deals in the airline, consumer products and retail sectors.

Southwest Airlines Co. said it would acquire AirTran Holdings Inc. for about $1.4 billion. Consumer-products maker Unilever NV agreed to buy beauty-products maker Alberto Culver Co. for $3.7 billion, and Wal-Mart Stores Inc. offered to pay nearly $4.3 billion for South African distributor Massmart Holdings Inc.

Shares of M&T Bank Corp. fell 7 percent on reports the firm'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.