US STOCKS-Dow, S&P 500 edge lower after last week's record highs

Mon Aug 5, 2013 5:03pm EDT

* Volume weakest so far in 2013 for a full trading day

* Apple and Facebook rally, helping Nasdaq end with a slim gain

* Compugen shares soar on Bayer partnership

* Dow down 0.3 pct, S&P 500 off 0.2 pct, Nasdaq up 0.1 pct

By Rodrigo Campos

NEW YORK, Aug 5 (Reuters) - The Dow and the S&P 500 dipped on Monday in the thinnest volume so far this year, following their record closing highs last week as a lack of major news left the market directionless.

Although about 100 companies in the S&P 500 are still scheduled to report earnings, the season is winding down sharply after last week's deluge. The week is also thin in terms of market-moving macroeconomic data.

"It was a pretty quiet day," said Paul Zemsky, head of asset allocation at ING Investment Management in New York. "We're almost done with earnings, and the quarter will remain lackluster. It's hard to disappoint, but earnings are not fantastic."

About 4.6 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, the lowest for a full day of trading so far this year. August posted the lowest monthly average volume in U.S. exchanges last year.

The technology sector was the S&P 500's best performer. A rally in Apple and Facebook shares helped the Nasdaq Composite Index finish Monday's session with a slim gain. Apple rose 1.5 percent to $469.45 after the United States overturned a ban on the sale of some older iPhones and iPads. Facebook, which was the Nasdaq's most actively traded stock, jumped 3 percent to $39.19 after a brokerage upgrade.

Data suggesting economic recovery in the UK and U.S. economies was improving showed British businesses boomed and activity at euro-zone companies expanded modestly in July, while growth in the U.S. services sector rebounded from a three-year low.

"PMIs were better than people thought, and that tells us this idea that the second half could be stronger is still valid. But right now, it's just wait and see," Zemsky said.

The Dow Jones industrial average fell 46.23 points or 0.3 percent, to end at 15,612.13. The S&P 500 slipped 2.53 points or 0.15 percent, to finish at 1,707.14. But the Nasdaq Composite Index added 3.364 points or 0.09 percent, to close at 3,692.951.

United Technologies Corp and The Travelers Companies were the Dow's biggest percentage decliners. United Technologies shares slid 1 percent to $106.64, while Travelers shares fell 1 percent to $83.15.

Friday marked the second day in a row for the Dow and the S&P 500 to end at record closing highs, with the Dow ending at 15,658.36 and the S&P 500 at 1,709.67.

The S&P 500 has risen for five of the past six weeks, gaining more than 7 percent over that period. The index closed at an all-time high on Friday despite a mixed reading on the labor market, which showed that hiring slowed in July, but the U.S. unemployment rate ticked lower.

The slip in the unemployment rate means that the Federal Reserve is closer to dialing back its $85 billion-a-month bond-buying program, Dallas Federal Reserve Bank President Richard Fisher said on Monday. The stimulus program is given credit for a large part of this year's rally in the U.S. stock market.

On the earnings front, shares of Tyson Foods climbed 4.1 percent to $29.69, a record closing high, after giving a full-year revenue outlook that exceeded expectations.

In contrast, U.S.-listed shares of HSBC Holdings Plc fell 4.5 percent to $55.37 after the company reported a drop in revenue, hurt by slower emerging markets.

Shares of retailer Fossil dropped 6 percent to $107.42 on three times their recent average volume after Barclays downgraded the stock to "underweight."

Of the 391 companies in the S&P 500 that have reported earnings for the second quarter, 67.8 percent have topped analysts' expectations, in line with the average beat over the past four quarters, data from Thomson Reuters showed. About 55 percent have reported revenue above estimates, more than in the past four quarters but below the historical average.

U.S.-listed shares of Compugen Ltd soared 44.5 percent to $7.89 after the company said it would enter into a cancer research partnership with Bayer AG .

Declining issues outnumbered advancers on the NYSE by a ratio of about 3 to 2. On the Nasdaq, the opposite trend prevailed, with 14 stocks rising for about every 11 that fell.