* S&P energy index falls with Brent crude oil futures
* July construction spending reaches 5-1/2 year high
* Dollar General raises Family Dollar bid
* Digital Ally shares extend rally
* Indexes: Dow off 0.18 pct, S&P off 0.05 pct, Nasdaq up
(Updates to close)
By Akane Otani
NEW YORK, Sept 2 U.S. stocks ended mostly lower
on Tuesday, retreating from records set the previous month, as
falling crude oil prices dragged energy shares down and offset
strong manufacturing data.
The S&P energy index fell 1.3 percent as the
prospect of slowing demand for oil in China and Europe and
concerns about an oversupply of oil brought Brent crude oil
futures to their lowest price since May 31, 2013.
Peabody Energy Corp was the biggest
loser among the S&P energy names, falling 3.7 percent to $15.29.
The strengthening dollar, which rose to its highest this
year against the yen, was also seen as weighing on oil prices.
"This isn't a cause of alarm for the market. We're just
seeing energy pulling back a bit after a very big market rally
and taking a bit of time to digest those gains," said Adam
Sarhan, chief executive of Sarhan Capital in New York.
Despite the day's declines, energy shares have overall
performed well, with the S&P 500 energy sector
outperforming the wider S&P index so far in 2014.
U.S. factory activity rose to its highest in nearly 3-1/2
years in August, and construction spending rebounded strongly in
Of the 30 stocks in the Dow industrials, Home Depot Inc
was the worst performer, falling 2 percent to $91.15
after CNBC reported that hackers may have stolen credit card
data from the company.
The Dow Jones industrial average fell 30.89 points,
or 0.18 percent, to 17,067.56. The S&P 500 ended down
1.09 points, or 0.05 percent, at 2,002.28. The Nasdaq Composite
added 17.92 points, or 0.39 percent, to end at 4,598.19.
Digital Ally Inc shares soared 79 percent to
$33.41, extending a rally that has pushed the stock up more than
900 percent since June 10, as outrage over the shooting of an
unarmed black teenager in Ferguson, Missouri, has fueled
interest in the use of wearable cameras by police.
Electric carmaker Tesla Motors Inc gained 5.3
percent to close at a record high $284.12 after Stifel Nicolaus
raised its target price for the company's stock to $400.
Merger activity continued to flourish. Discount retailer
Dollar General Corp raised its bid for Family Dollar
Stores Inc by 2 percent to $80 per share, or $9.1
billion. Family Dollar shares edged up 0.5 percent to $80.22
while Dollar General advanced 0.6 percent to $64.36.
About 5.2 billion shares traded on all U.S. platforms,
according to BATS exchange data, compared with the five-day
average of 4.4 billion.
(Reporting by Akane Otani; Editing by Chizu Nomiyama, Nick
Zieminski and Steve Orlofsky)