* Pending home sales drop more than expected
* Factory orders increase for third straight month
* Ford shares advance after December sales data
* Dow slips 0.5 pct, S&P flat, Nasdaq down 0.5 pct
* For up-to-the-minute market news, click STXNEWS/US
(Updates to midafternoon, changes byline)
By Edward Krudy
NEW YORK, Jan 5 (Reuters) - The Dow and Nasdaq slipped on
Tuesday as a plunge in pending home sales increased concerns
about the housing market a day after stocks rose to 15-month
highs.
An industry report that showed a 16 percent fall in sales
contracts for previously occupied homes in November gave a
stark reminder of the uncertain economic recovery. For details, see []
The S&P 500 was slightly higher, buoyed by the energy and
financial sectors.
"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 Dow Jones industrial average <> fell 53.06 points,
or 0.50 percent, at 10,530.90. The Standard & Poor's 500 Index
<.SPX> rose less than a point to 1,133. The Nasdaq Composite
Index <> dropped 10.95 points, or 0.47 percent, at
2,297.47.
But stock losses were limited by another report that showed
manufacturing orders climbed for a third straight month in
November, some of the positive evidence that helped push stocks
higher for the past month.
The drop in pending home sales from the National
Association of Realtors broke a nine-month streak of gains and
compared with economists' expectations of a 2 percent drop.
Luxury home builder Toll Brothers <TOL.N> lost 1.4 percent
to $18.78. But other homebuilder shares were not affected, and
some analysts said the housing market was stabilizing even if
the recovery was unlikely to be smooth.
The government said factory orders rose more than expected
in November. The data suggested the manufacturing sector would
continue to support a recovery one day after the Institute for
Supply Management's index of factory activity beat estimates.
The U.S. dollar edged higher against a basket of
currencies, weighing on commodity prices and capping gains in
the materials and energy sectors.
U.S. oil futures fell 0.4 percent to $81.16 a barrel after
a hitting a 2-month high in the last session.
A bright spot was Ford Motor Co <F.N>, which surged 9
percent to $11.21, hitting a 52-week high, after it said its
December sales rose 33 percent year-over-year.
[].
The Dow's top performer was Kraft Foods Inc <KFT.N>, which
gained 3.5 percent to $28.39 after Warren Buffett's Berkshire
Hathaway <BRKa.N> 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 <CBRY.L>.
[]
(Reporting by Edward Krudy; Editing by Kenneth Barry)
