* Caterpillar profit stronger than expected, shares rally
* Apple earnings due after markets' close
* U.S. new home sales fall for second straight month in Dec
* Dow up 0.2 pct, S&P down 0.1 pct, Nasdaq down 0.6 pct
NEW YORK, Jan 27 (Reuters) - The S&P 500 and Nasdaq extended last week's selling on Monday after weaker-than-expected new home sales data and ongoing concerns about emerging markets, while the Dow gained with shares of Caterpillar on strong earnings.
The technology sector led losses but both the S&P 500 and the Nasdaq pared earlier losses.
The day's mixed moves follow a steep selloff late last week mainly tied to concerns about emerging market growth.
"There's still a lot of nervous money hanging around," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
"We still see stress in the emerging markets. We see questions about China's growth. The Fed is meeting this week and the consensus is they're going to proceed with the taper."
Monday's data showed sales of new U.S. single-family homes fell more than expected in December.
The Fed's two-day policy meeting begins on Tuesday. Many market participants expect another selloff if the Fed decides to keep withdrawing stimulus, further pressuring equities already roiled by a flight from emerging markets last week.
Big technology names weighed on the market. Google shares were off 1.2 percent at $1,110.48. Microsoft shares lost 1.2 percent to $36.36.
The Dow Jones industrial average rose 27.45 points or 0.17 percent, to 15,906.56, the S&P 500 lost 1.17 points or 0.07 percent, to 1,789.12 and the Nasdaq Composite dropped 23.424 points or 0.57 percent, to 4,104.749.
Last week's heavy selling raised concerns the market may be in for a major correction, especially with the S&P 500 closing below its 50-day moving average for the first time since Oct. 9.
The Nasdaq briefly fell below its 50-day moving average on Monday.
Caterpillar shares jumped 4.7 percent to $90.27 after stronger-than-expected quarterly profit. Cost cuts and an uptick in demand for building equipment offset continued weak sales to the mining industry.
Apple Inc, up 1.3 percent at $552.97, is due to report earnings after the close of trading. It may notch its most successful holiday shopping season yet, setting records for sales of its gift-friendly iPhones and iPads. Apple will, however, continue to draw investor scrutiny over sales in ultra-competitive China, its No. 2 market but a drag on revenue and margins in recent quarters.