Dow falls but S&P up

The Dow industrials slipped overnight as a plunge in November pending home sales increased concerns about the housing market, though a sign of improvement in the manufacturing sector limited losses.

The S&P 500 was marginally higher in early afternoon trading after flipping between positive and negative territory following the economic data's mixed signals on the economy.

Stocks declined after the National Association of Realtors said pending home sales broke a nine-month streak of gains to fall 16 per cent in November, a far sharper drop than had been expected.

After the data, luxury home builder Toll Brothers lost 1.1 per cent to $US18.85.

"This data shows that the housing market remains fundamentally weak and reminds us how bad things would be without government life support," said Gary Shilling, president of A. Gary Shilling & Co in Springfield, New Jersey.

The housing number was partially offset by the government's report that new factory orders rose 1.1 per cent in November, their third straight monthly increase. The data suggested the manufacturing sector would continue to support an overall economic recovery.

"Factory orders were better than expected, but since they came after the recent durable goods number, I think they were somewhat priced into the market," Shilling said.

The Dow Jones industrial average slipped 28.57 points, or 0.27 per cent, to 10,555.09. The Standard & Poor's 500 Index was up 1.44 points, or 0.13 per cent, at 1134.43.

The Nasdaq Composite Index was unchanged at 2308.11, down 0.29 of a point, or 0.01 per cent.

A bright spot came from Ford Motor Co, which surged 8.6 per cent to $US11.16 after it said its December sales rose 33 per cent year-over-year.

Ford's stock climbed as high as $US11.20, a fresh 52-week high, following the news of its jump in December vehicle sales.

The Dow's top performer was Kraft Foods Inc, which gained 3.3 per cent to $US28.34 after Warren Buffett's Berkshire Hathaway voted "no" on the company's proposal to issue 370 million shares to help finance its proposed purchase of British chocolate candy maker Cadbury Plc.

- Reuters