Dow tumbles as Wall St pauses from historic rally

NEW YORK (AP) — Stocks fell Monday as investors took a pause from a historic rally in September and held back ahead of a busy week of economic and earnings reports.

According to preliminary calculations, the Dow Jones industrial average fell 78.41, or 0.7 percent, to close at 10,751.27

The Standard & Poor’s 500 index fell 9.21, or 0.8 percent, to 1,137.03. The Nasdaq composite index fell 26.23, or 1.1 percent, to 2,344.52.

The Dow Jones industrial average lost nearly 80 points after factory orders fell slightly more than expected in August and contracts for new homes remained far below last year’s pace.

Analysts say the market was due for a pullback following a 10.4 percent gain in the Dow last month. The monthlong rally has come on relatively low volume, a sign that many investors are still waiting on the sidelines.

Doug Roberts, chief investment strategist at Channel Capital Research, said the market has been trading in a broad range over the past six months. And with it approaching the high end of that range, a pullback is natural.

The market has been “alternating between euphoria and despair,” Roberts said of the wide trading range dating back to late April, when stocks hit their high for the year.

This week brings a number of potentially important news events for stocks, including the monthly jobs survey on Friday and earnings from Dow component Alcoa Inc. on Thursday, the traditional kickoff to the quarterly earnings season.

In corporate news, France’s Sanofi-Aventis launched an $18.5 billion hostile takeover offer for Genzyme Corp. Sanofi-Aventis’ previous offer was rejected by Genzyme’s board, so it is now taking the offer directly to shareholders. The offer, at $69 per share, is unchanged from Sanofi-Aventis’ original offer in July.

Swiss regulators said they will require the country’s two biggest banks, Credit Suisse Group and UBS AG, to hold more money in reserve than the amount required under newly agreed upon international standards.

About three stocks fell for every one that rose on the New York Stock Exchange where volume came to 940 million shares.