* Energy shares give up gains as oil retreats

* Financials drag; Fifth Third Bancorp off 8 pct

* Dow off 0.8 pct, S&P off 0.9 pct, Nasdaq off 0.3 pct

* For up-to-the-minute market news, click [STXNEWS/US] (Updates to midday; changes byline)

By Angela Moon

NEW YORK, Oct 26 (Reuters) - U.S. stocks fell on Monday, dragged lower by materials and financial shares, erasing earlier gains as the U.S. dollar rose and commodity prices waned.

The energy and materials sectors, which had helped lift major indexes more than 1 percent earlier, reversed course as U.S. crude futures CLc1 fell below $80 a barrel, while the ICE Futures dollar index .DXY gained 0.5 percent.

But the Nasdaq's losses were kept in check by gains in Microsoft Corp (MSFT.O: Quote, Profile, Research). The stock climbed 2.6 percent to $28.75 after a number of analysts raised their price targets on the company, following the software giant's recent quarterly results on Friday that surged past expectations. For details, see [ID:nBNG463985]