By MATT JARZEMSKY

Stocks snapped a four-day win streak as concerns about steel demand weighed on materials shares and a late selloff in crude oil dented the energy sector.

The Dow Jones Industrial Average declined 40.27 points, or 0.3%, to 13553.10, on Monday. The blue-chip benchmark had rallied to its highest closing level since December 2007 last week after Federal Reserve Chairman Ben Bernanke announced an open-ended bond-buying program meant to spur the economy.

The Standard & Poor's 500-stock index gave up 4.58 points, or 0.3%, to 1461.19. The Nasdaq Composite Index lost 5.28 points, or 0.2%, to 3178.67.

"We had all this buildup to the Fed action," said Mike Gibbs, co-head of the equity advisory group at Raymond James Financial. "It's time to let the dust settle a little bit."

The materials sector led declines, with such shares in the S&P 500 falling 1.5%, the most in nearly a month. J.P. Morgan analysts downgraded several steel-related stocks to "neutral" from "overweight," saying weak steel demand undercuts the shares' prospects. Among those downgraded were coal and iron-ore producer Cliffs Natural Resources (CLF), which fell $3.19, or 7%, to $42.36, and U.S. Steel (X), which dropped 1.04, or 4.7%, to 21.31. Meanwhile, Swedish steel company SSAB (SSAB-A.SK) warned that weak demand would hurt its third-quarter earnings. Its shares fell 6.9% in Stockholm.

Energy shares extended losses after a late-afternoon plunge in oil prices. Chevron (CVX) dropped 11 cents, or 0.1%, to 117.14, reversing earlier gains after the selloff. Crude-oil prices fell $2.38, or 2.4%, to settle at $96.62 a barrel.

Reuters

Traders work on the floor of the New York Stock Exchange Monday.

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The Federal Reserve Bank of New York's Empire State business conditions index for September fell from a month earlier. Economists had expected the result to improve.

"Clearly, the economy has changed to a different slower gear than it was in the first half," said Ben Halliburton, chief investment officer at Tradition Capital Management. "The $24 trillion question is when or if the economy and earnings are going to have a bigger impact on the market, or are the central banks the only game in town?"

European markets lost ground. The Stoxx Europe 600 fell 0.3% after reaching a 15-month high on Friday, after the region's finance ministers remained divided over the issue of a banking union and over the timing of the implementation of an overhaul of the sector.

In Asia, China's Shanghai Composite slumped 2.1% as anti-Japan demonstrations tied to the countries' dispute over islands in the region intensified, leading to some factory shutdowns. Investors also expressed concern over whether further measures to slow the property market would be introduced. Japan's market was closed for a holiday.

India's Sensex index rose 0.4%, closing at a 52-week high, but pared gains after the central bank left its policy rate unchanged.

Gold prices dropped 0.1%, to settle at $1,767.70 a troy ounce. The dollar rose against the euro and yen. Treasury prices rose, sending the yield on the 10-year note down to 1.838%.

In corporate news, Apple (AAPL) rose 8.50, or 1.2%, to 699.78, after saying preorders for the iPhone 5 the first day it was available more than doubled such orders for the device's predecessor. Apple appeared to sell out its initial inventory of the new smartphone just an hour after accepting preorders.

Office Depot (ODP) rallied 13 cents, or 5.3%, to 2.60, after Starboard Value LP disclosed a 13.3% stake in the office-products retailer, which makes the activist investment firm the company's largest holder. Starboard said Office Depot's management can cut expenses and take other measures to improve profitability.

General Electric (GE) slipped six cents, or 0.3%, to 22.05, after the National Transportation Safety Board issued "urgent safety recommendations" on GE engines that have been used on Boeing (BA) jets. Boeing dropped 1.36, or 1.9%, to 69.92.

Write to Matt Jarzemsky at matt.jarzemsky@dowjones.com