CATERPILLAR : Wall Street turns negative, Caterpillar drags

NEW YORK (Reuters) - Stocks retreated on Monday, with the major indexes turning negative on a reversal in bank shares and weighed down by a grim outlook and massive job cuts from Caterpillar .

Highlights:

* News that Pfizer Inc would buy rival Wyeth for about $68 billion had buoyed sentiment overall, but worries over the benefit of the deal for Pfizer weighed on the company's stock, making it one of the Dow's biggest drags.

* The Dow Jones industrial average <.DJI> was down 28.67 points, or 0.35 percent, at 8,048.89. The Standard & Poor's 500 Index <.SPX> dipped 1.69 points, or 0.20 percent, to 830.26. The Nasdaq Composite Index <.IXIC> slipped 2.18 points, or 0.15 percent, at 1,475.11.

(Reporting by Leah Schnurr; Editing by James Dalgleish)