US STOCKS-Wall Street falls on caution after rally
* Euro zone finance ministers begin third attempt at Greek deal
* Investors take profits after last week's strong finish
* Qatar cashes in its warrants in Barclays, causing shares to dip
* Knight Capital in talks for unit sale; shares jump
* Indexes off: Dow 0.8 pct; S&P 0.7 pct; Nasdaq 0.4 pct
By Edward Krudy
NEW YORK, Nov 26 (Reuters) - U.S. stocks eased on Monday after a rebound rally pushed the S&P 500 to its best week in more than five months last week and as investors focused on talks to release aid to Greece and negotiations in Washington to avoid the U.S. "fiscal cliff."
Major indexes ended last week with gains of 3 percent to 4 percent, recovering some of their losses following an 8 percent correction since September. The Dow and S&P 500 both closed above key technical levels for the first time since Nov. 6, which could provide additional support. The Dow ended above 13,000, while the S&P broke above 1,400.
Investors continued to chew over two of the greatest overhangs for markets. Euro zone finance ministers and the IMF will seek to unfreeze the second bailout package for Greece on Monday. At the same time, U.S. lawmakers have made little progress in the past 10 days toward a compromise to avoid the harsh tax increases and government spending cuts.
"Friday was a big day in the stock market," said Tim Ghriskey, chief investment officer at Solaris Group in Bedford Hills, New York. "So it's not surprising at all to see some profit-taking on that."
Knight Capital Group Inc is in talks about possibly selling its market-making operation, its largest and most profitable business, but it is not known if a deal will happen, sources familiar with the matter said on Saturday. The stock jumped 10 percent to $2.74.
The Dow Jones industrial average dropped 102.43 points, or 0.79 percent, to 12,907.25. The Standard & Poor's 500 Index lost 10.42 points, or 0.74 percent, to 1,398.73. The Nasdaq Composite Index fell 12.31 points, or 0.41 percent, to 2,954.54.
Qatar has cashed in its remaining warrants in Britain's Barclays Plc, a move that should yield a $280 million profit. The warrants have not yet been converted, but conversion would dilute the holding of shares by other investors. U.S.-listed shares of Barclays fell 6.4 percent to $15.24.
Apple Inc has asked a federal court to add six more products to its patent infringement lawsuit against Samsung Electronics Co, including the Samsung Galaxy Note II, in the latest move in an ongoing legal war between the two companies. Apple shares were up 1.1 percent at $577.86.
While holiday shopping appeared to be off to a good start, analysts cautioned against reading too much into one weekend's numbers. Retailers have to sustain the initial burst through the November-December holiday season, which can account for a third of annual sales and 40 to 50 percent of profits for the year.
Shares in department store Macy's Inc, which offered consumers deep discounts on Black Friday, fell 3.5 percent to $40.27. The SPDR S&P retail exchange traded fund fell 1.6 percent to $62.23.
Total spending for the long weekend rose to $59.1 billion, up 12.8 percent from last year, according to the National Retail Federation. That was down from the prior year's 16.4 percent increase.
Black Friday's online sales topped $1 billion for the first time ever as more consumers used the Internet do their early holiday shopping, comScore Inc said on Sunday.
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