By Chuck Mikolajczak

NEW YORK, Oct 26 (Reuters) - Energy and materials stocks fell on Monday, driven by a drop in oil and gas prices and a rebound in the U.S. dollar.

Building materials maker Louisiana Pacific Corp (LPX.N: Quote, Profile, Research) tumbled 7.9 percent to $5.70 and served to drag the S&P MidCap Materials index 2.1 percent lower, while heavy construction materials maker Texas Industries Inc (TXI.N: Quote, Profile, Research) slid 6.4 percent to push the S&P SmallCap Materials index down 2.3 percent.

The S&P MidCap Energy index dropped 1.9 percent and the S&P SmallCap Energy index declined 1.1 percent.

U.S. crude futures CLc1 slid below $79 a barrel after initially climbing above $81 while November natural gas NGX9 fell more than 5 percent in the face of mild weather. For details, see [ID:nN26475549] [ID:nN26192498]

The ICE Futures dollar index .DXY gained 0.8 percent.

"We're running up into the limit as to how much people will pay to try and hedge against a declining dollar," said Edward Hemmelgarn, president of Shaker Investments in Cleveland.

"There isn't enough of a supply and demand imbalance to start driving [oil] higher past $80."

SmallCap PrivateBancorp Inc (PVTB.O: Quote, Profile, Research) plunged 34.9 percent to $12.37 after the Chicago lender posted a surprise third-quarter loss, as weakness in commercial real estate forced the company to almost triple its provisions for bad loans, and announced a $175 million stock offering. Investors remain concerned about the problems in the commercial lending sector, as more losses are anticipated. [ID:nBNG81126]