US STOCKS-Wall St retreats but 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 0.6 pct, S&P 500 down 0.4 pct, Nasdaq down 0.5 pct (Updates to midday)

By Caroline Valetkevitch

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

Energy shares were in focus as crude oil fell, sending the S&P Energy index down 0.5 percent. 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. Oversupply is already a major concern for energy investors, with crude falling more than 50 percent from a June high.

The day's decline in stocks follows gains of more than 1 percent on each of the major indexes on Monday.

"This has been a good quarter and we had a good move yesterday. I think a lot of people want to take some profits heading into the new quarter and ahead of Friday's jobs report and the upcoming earnings season," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York, noting that the profit period could be weaker than investors expect.

S&P 500 earnings are expected to have declined in the first quarter from a year ago, Thomson Reuters data showed.

At 12:54 p.m., the Dow Jones industrial average fell 104.16 points, or 0.58 percent, to 17,872.15, the S&P 500 lost 9.04 points, or 0.43 percent, to 2,077.2 and the Nasdaq Composite dropped 22.37 points, or 0.45 percent, to 4,925.07.

Tuesday marks the end of the first quarter. The Dow is on track to gain 0.5 percent for the period, while the S&P 500 is up 1.1 percent and the Nasdaq is up 4.1 percent. It would be 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.

All three are set to end March in the red.

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 percent to $196.25 while Montpelier rose 0.7 percent to $38.40. Endurance fell 4.3 percent to $61.55. The news follows a number of recent big deals.

March payrolls data are 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.

Declining issues outnumbered advancing ones on the NYSE by 1,774 to 1,201, for a 1.48-to-1 ratio; on the Nasdaq, 1,602 issues fell and 1,052 advanced, for a 1.52-to-1 ratio.

The S&P 500 was posting 19 new 52-week highs and 1 new lows; the Nasdaq Composite was recording 52 new highs and 33 new lows. (Additional reporting by Ryan Vlastelica; Editing by Nick Zieminski)