* Investors pause for profits
* Retail stocks down; Best Buy, Wal-Mart weigh
* Indexes dip; S&P 0.2 pct, Dow 0.1 pct, Nasdaq 0.2 pct (Updates to early morning, adds quote)
By Angela Moon
NEW YORK, Aug 10 (Reuters) - U.S. stocks edged lower on Monday as a four-week rally encouraged investors to book profits ahead of a Federal Reserve Board meeting and earnings from some of the nation's largest retailers later this week.
U.S. stocks rallied on Friday, pushing the Standard & Poor's 500 Index to a 10-month high as a better-than-expected July jobs report underpinned hopes that the economy was on the cusp of a recovery.
Wal-Mart Stores Inc, a Dow component, fell 0.1 percent to $49.23 after JP Morgan Chase & Co said the retail giant will not post any growth in second-quarter same-store sales, weighed down partly by its weak summer seasonal business.
Warren Buffett's Berkshire Hathaway Inc reported its best quarter in nearly two years on Sunday, but operating earnings for the second quarter fell short of forecasts, and the shares fell about 6 percent.
"We have a quiet day ... with some profit-taking and data due later in the week," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.
Even with the broader S&P index now up more than 48 percent from its 12-year closing low in early March, Ablin said the market is not poised for a pull-back as "buyers are still waiting to get into the market."
The Dow Jones industrial average was down 10.35 points, or 0.11 percent, at 9,359.72. The Standard & Poor's 500 Index was down 1.75 points, or 0.17 percent, at 1,008.73. The Nasdaq Composite Index was down 2.08 points, or 0.10 percent, at 1,998.17.
Electronic retailer Best Buy Co Inc fell nearly 5 percent to $37.91 after Goldman Sachs downgraded the firm to "neutral" from "buy" and removed it from America's Buy list.
Shares of Freddie Mac, however, surged 73 percent to $1.28 after reporting its first quarterly profit in two years late on Friday. The mortgage-finance company has been relying on financing from the U.S. Treasury to stay afloat.
McDonald's Corp shares rose 1.76 percent to $56.17 after the fast-food restaurant operator reported global comparable sales rose 4.3 percent and U.S. comparable sales climbed 2.6 percent for July.
Investors will continue to hunt for signs of economic improvement from the Fed's two-day meeting that begins Tuesday. The central bank is expected to hold rates near zero, but investors are closely watching for signals of an exit strategy from the Fed's efforts to prop up the financial system.
Also later this week, July retail sales data as well as quarterly scorecards from major retailers, including Wal-Mart, J.C. Penney Co and Macy's Inc will give a snapshot of the industry and how consumer spending is faring in the recession.