US STOCKS-Wall St dips after rally; indexes set for quarterly gain

* Oil prices weaken for third straight day

* Charter to buy Bright House for about $10 bln

* Nasdaq set for longest-ever streak of quarterly gains

* Dow down 0.4 pct, S&P 500 and Nasdaq both fall 0.3 pct (Adds economic data)

By Ryan Vlastelica

NEW YORK, March 31 (Reuters) - U.S. stocks fell on Tuesday in a modest retreat from the previous session's sharp rally, but major indexes remained on track for a positive first quarter and the S&P 500 was set for its ninth straight quarterly rise.

Energy shares were in focus as crude oil fell 1.4 percent to $48 per barrel, sending the S&P Energy index down 0.6 percent as one of the weakest industry groups of the day. Exxon Mobil Corp fell 0.7 percent to $85.06.

Oil was pressured as Iran and six world powers entered a final day of talks on a nuclear deal that could see the energy-rich country increase oil exports. The talks come when oversupply is already a major concern for energy investors, having contributed to crude falling more than 50 percent from a high in June.

Endurance Specialty Holdings Ltd agreed to buy reinsurer Montpelier Re Holdings Ltd for about $1.83 billion, while Charter Communications Inc (NasdaqGS: CHTR - news) agreed to acquire Bright House Networks in a roughly $10 billion deal.

Charter rose 7.9 percent to $197.89 while Montpelier rose 0.7 percent to $38.40. Endurance fell 4.3 percent to $61.55.

The news follows a number of big deals on Monday, which contributed to the market's broad advance and the Dow's biggest one-day rise in more than a month.

"Today's move is largely in reaction to yesterday, a back-to-normal session, but our view on the market is still constructive. As we see continued acquisition deals, that will be supportive for the backdrop," said James Dunigan, chief investment officer at PNC Wealth Management in Philadelphia.

Trading may be volatile ahead of the March payroll report due Friday, when the stock market is closed for the Good Friday holiday. If the report is strong, investors could view the U.S. Federal Reserve as more likely to raise rates earlier than currently expected.

The day's economic data was mixed, with March consumer confidence unexpectedly surging in March while the Institute for Supply Management-Chicago Business Barometer rose less than expected in the month.

Tuesday marks the end of the first quarter. Over the period, the Dow rose 0.5 percent, the S&P 500 rose 1.1 percent and the Nasdaq rose 4.1 percent. This is the ninth straight quarterly advance for the S&P and Nasdaq, the longest such streak for the S&P since 1998 and the longest for the Nasdaq in its history. Despite that, all three are set to be negative for March.

The Dow Jones industrial average fell 63.76 points, or 0.35 percent, to 17,912.55, the S&P 500 lost 5.54 points, or 0.27 percent, to 2,080.7 and the Nasdaq Composite dropped 15.34 points, or 0.31 percent, to 4,932.11.

Declining issues outnumbered advancing ones on the NYSE by 1,591 to 1,277, for a 1.25-to-1 ratio; on the Nasdaq, 1,561 issues fell and 975 advanced, for a 1.60-to-1 ratio.

The S&P 500 was posting 15 new 52-week highs and 1 new low; the Nasdaq Composite was recording 40 new highs and 27 new lows. (Editing by Nick Zieminski)