* Pfizer, Allergan drop after biggest-ever healthcare deal
* Energy stocks helped by Saudi move to stabilize prices
* Alcoa up as Elliott takes stake
* Indexes down: Dow 0.15 pct, S&P 0.12 pct, Nasdaq 0.02 pct (Updates to afternoon, adds commentary changes byline)
By Sinead Carew
Nov 23 (Reuters) - U.S. stock indexes turn negative in afternoon trading on Monday after a week of strong gains, while a record healthcare deal failed to impress investors.
After a week when S&P 500 had its best performance of the year, investors were also unimpressed by Monday's economic data and some were concerned that economic growth may be slower than expected and holiday season sales may disappoint, said Stephen Massocca, Chief Investment Officer of Wedbush Equity Management LLC in San Francisco.
"We had a very large rally last week and it's not surprising to see the market correct after that," said Massocca.
The Dow Jones industrial average fell 26.95 points, or 0.15 percent, to 17,796.86, the S&P 500 lost 2.47 points, or 0.12 percent, to 2,086.7 and the Nasdaq Composite dropped 1.15 points, or 0.02 percent, to 5,103.77.
U.S. home resales fell in October as a persistent shortage of properties limited choice for potential buyers and pushed up prices, suggesting some softening in the housing market recovery after strong gains early this year.
A separate report showed Markit's Purchasing Managers Index hit a 25-month low in early November, highlighting continued weakness in the factory sector.
Pfizer's announcement of what is expected to be the biggest-ever healthcare deal pushed shares down almost 3 percent and made Pfizer one of the biggest drags on the S&P. Its acquisition target Allergan was down 2.7 percent after the $160 billion deal was announced.
Analysts cited weaker than hoped for projected savings from the complex deal as well as antitrust issues and a possible delay in Pfizer's plan to split in two companies.
In the week of the U.S. Thanksgiving holiday when the markets are closed and many people take more than one day off, trading could be "very quiet", said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.
"Chances are, the bulk of the action will take place Monday and Tuesday and then (traders) will turn their machines off," he said.
The S&P utilities sector was the worst performer with a 1-percent decline, followed by telecommunications services . Those sectors tend to be affected by expectations the U.S. Federal Reserve will raise interest rates in December.
The consumer staples sector. was the strongest with a 0.8 percent increase while the energy sector was up 0.7 percent, as crude prices rose after Saudi Arabia agreed to cooperate with other oil producers to stabilize prices.
Tyson Foods jumped 9.8 percent to $47.93 after quarterly sales beat estimates.
Alcoa was up 4.6 percent at $9.08. Elliott Management disclosed a 6.5-percent stake in the aluminum maker.
NYSE advancing issues outnumbered decliners 1,562 to 1,447, for a 1.08-to-1 ratio on the upside; on the Nasdaq, 1,558 issues rose and 1,248 fell for a 1.25-to-1 ratio favoring advancers.
The S&P 500 posted 25 new 52-week highs and 4 lows; the Nasdaq recorded 70 new highs and 72 lows. (Additional reporting by Abhiram Nandakumar in Bengaluru; Editing by Nick Zieminski)