Updated from 4:05 p.m. EDT

Apprehension ahead of the Federal Reserve's monetary policy meeting this week prompted investors to take some money off the table Monday after a recent advance.

The Dow Jones Industrial Average ended down 128 points, or 1.4%, at 9073, while the Nasdaq fell 34 points, or 2.1%, to 1610. The S&P 500 lost 14 points, or 1.4%, to 981. All three major averages advanced last week, marking the fourth week of gains for the Dow and S&P 500.

"I think we're taking a breather," said Sean Martin, head trader at A. Gary Shilling & Co. "You can find many excuses for this selloff, but the fact is, stocks have run up pretty well, and people are looking to take profits."

Some market watchers said investors were nervous about being long ahead of the Fed's decision. The central bank's policymaking arm begins its two-day meeting on Tuesday, and most investors expect a quarter-point cut Wednesday. A more aggressive half-point cut hasn't been ruled out, but recent economic data have suggested that this might not be necessary.

Also weighing on investor sentiment Monday were comments from Morgan Stanley analyst Steve Galbraith, who said he is becoming more defensive on the market. Galbraith recommended that investors underweight technology stocks and said they should overweight consumer and industrial issues.

"With the S&P 500 at our year-end target of 1000, the market is already discounting a fairly healthy recovery," he said. "As such, we believe investors will benefit by paring weightings in sectors that have outperformed and adding to sectors that have underperformed."

Volume on the Big Board reached 1.35 billion, with losers beating winners by 2 to 1. Volume on the Nasdaq hit 1.7 billion, with decliners beating advancers by 2 to 1.

Richard McCabe, chief market analyst at Merrill Lynch, said he believes the market has lost some momentum in the last two weeks, "and a temporary pullback could develop in late June-early July." Still, McCabe believes there is much more potential for stocks to climb this year, because technical indicators remain strong.

Merrill's chief quantitative strategist, Richard Bernstein, advises investors to be more selective, however, noting that earnings expectations for the second half of the year are too high. He suggests that investors overweight higher-quality issues, which he said are undervalued, have higher dividend yields "and tend to outperform during periods when earnings expectations are revised down."

Jeffrey Saut, chief investment strategist at Raymond James, said that while he does think the economy is improving, it is doing so at "crawl speed."

"Unfortunately, crawl speed is not fast enough to bolt us out of the economic soft spot, or support the stock market's current valuation level," he said.

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