* Wal-Mart offers $4 bln for South Africa's Massmart
* AirTran soars after Southwest bid
* Unilever to buy Alberto Culver for $3.7 bln
* Indexes off: Dow 0.3 pct, S&P 0.3 pct, Nasdaq 0.4 pct (Updates to midday, changes byline)
By Rodrigo Campos
NEW YORK, Sept 27 (Reuters) - U.S. stocks fell on Monday amid a flurry of proposed acquisitions as investors paused following four straight weeks of gains on Wall Street.
Despite the dip in the market, the S&P 500 is still on track to post one of its largest monthly percentage gains in almost 20 years.
Consumer goods group Unilever Plc plans to buy U.S. hair care group Alberto Culver Co for $3.7 billion. Alberto Culver rose nearly 20 percent to $37.62, while Unilever's New York-traded stock added 1.5 percent to $29.
Wal-Mart Stores Inc, the world's largest retailer, offered to buy Massmart, South Africa's third-largest retailer by value, for more than $4 billion as it seeks to expand on the continent. Wal-Mart dipped 0.6 percent to $53.76.
"In a slow growth world you're going to have more companies looking to merge because that's how they can grow earnings," said Anton Schutz, president at Mendon Capital in Rochester, N.Y.
"Another big issue has been the flow of funds into fixed income and out of equities," he said. "If you keep having companies bought every week that's part of the flow of funds and that's helpful."
Schutz also said investors were reluctant to return to the stock market before the U.S. Congressional elections in November.
"There's a lot of wrestling over what the implications if the coming election are going to be," he said.
The Dow Jones industrial average dropped 27.97 points, or 0.26 percent, to 10,832.29. The Standard & Poor's 500 Index fell 3.87 points, or 0.34 percent, to 1,144.80. The Nasdaq Composite Index lost 8.78 points, or 0.37 percent, to 2,372.44.
The S&P 500 is up more than 9 percent since the start of September as investors have welcomed signs the economy might avoid a double-dip recession. The benchmark has posted monthly gains of more than 9 percent only twice since the start of 1992.
AirTran Holdings Inc rose 62 percent to $7.37 after Southwest Airlines Co offered to buy the regional carrier for $7.69 per share. Southwest jumped 10 percent to $13.51, while the Arca airline index rose 2.7 percent.
About 2.8 billion shares traded by midday on the New York Stock Exchange, the American Stock Exchange and Nasdaq, about average so far this session.
Declining stocks outnumbered advancers on the NYSE by a ratio of about 7-to-5, while on the Nasdaq, about three stocks fell for every two that rose.