U.S. stocks slipped following the Standard & Poor's 500 Index's best weekly rally this year, as gains in consumer companies were overshadowed by a retreat in Allergan Plc and Pfizer Inc. amid their record $160 billion merger deal.

The S&P 500 fell 0.1 percent to 2,086.66 at 4 p.m. in New York, after rising 3.3 percent last week, the most since December.

Stocks earlier extended declines as concerns over terrorism intensified after AFP reported an explosive belt was found in a trash bin in a Paris suburb. The search for a key suspect in the Paris terror attacks kept Brussels in an unprecedented lockdown that brought business to a standstill.

The main U.S. equity gauge surged last week after Federal Reserve officials signaled the economy is strong enough to withstand the first rate increase since 2006, and investors grew more comfortable with the notion that borrowing costs may soon be higher. Stocks have gained in seven of the past eight weeks, boosted by raw-material, industrial and technology shares, taking the S&P 500 to within 2 percent of a record set in May.

San Francisco Fed President John Williams said on Saturday there's a "strong case" for a rate increase in December assuming U.S. economic data continues to be encouraging. Fed Governor Daniel Tarullo said today in an interview on Bloomberg Television economic data received since the central bank met in September had been mixed, as continued low inflation tempered his enthusiasm over progress made this year in lowering unemployment.

A report today showed sales of previously owned homes retreated in October from the second-highest level since 2007 as lean inventory limited momentum in residential real estate. Recent data have bolstered the case for raising borrowing costs for the first time since 2006, with traders now pricing in a 72 percent probability that the Fed will move next month. The Commerce Department's second reading on gross domestic product for the third quarter is due tomorrow.

The earnings season is drawing to a close, with almost all companies in the S&P 500 having reported. Of those, 75 percent beat earnings estimates, while only 44 percent exceeded sales forecasts. Analysts project profits for index members dropped 3.8 percent in the third quarter, compared with for a 7.2 percent decline at the start of the season.