US STOCKS-Energy, healthcare stocks drag Wall Street lower

* Micron gains on bullish brokerage comment
* Microchip provides upbeat sales outlook
* Energy stocks slide as oil drops 1%
* Indexes: Dow down 0.26%, S&P off 0.23%, Nasdaq flat

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By Sruthi Shankar and Susan Mathew
Jan 7 (Reuters) - Wall Street's main indexes fell on
Tuesday, dragged down by oil and healthcare stocks as investors
nervously awaited further developments on the U.S.-Iran
conflict.
Energy stocks .SPNY were down 0.9% as oil prices
surrendered gains made over the previous days, while healthcare
stocks .SPXHC fell 0.6%, led by Merck MRK.N that was hit by
mixed results in its Phase 3 trial of a cancer drug.
Equity markets have been trying to shake off concerns from
escalating tensions between Washington and Tehran after the
killing of a top Iranian general last week by the United States.
After closing higher on Monday and steadying into the open
on Tuesday, U.S. stocks lost momentum again.
"The reason why we are modestly negative here is obviously
the tension in the Middle East and the noise coming out around
it," said Phil Blancato, chief executive officer of Ladenburg
Thalmann Asset Management in New York.
"I think the market is being very patient here, just waiting
for news from one side or the other and if there is any kind of
retaliatory issue with the US. It is not a significant move."
Latest data showed new orders for U.S.-made goods fell in
November, pulled down by steep declines in demand for machinery
and transportation equipment, pointing to sustained weakness in
manufacturing. However, another reading on the non-manufacturing sector
activity for November came in slightly better than expected.
Helping the tech-heavy Nasdaq .IXIC outperform on Tuesday
was Micron Technology Inc MU.O , which rose 6% after Cowen & Co
upgraded the chipmaker to "outperform" on an
earlier-than-expected recovery in the memory market.
The brokerage also raised its rating on hard-disk maker
Western Digital Corp WDC.O to "outperform". Its shares rose
5.2%.
Another bright spot in the semiconductor space was Microchip
Technology MCHP.O , which rose 5.1% after raising the mid-point
of its sales forecast for the third quarter.
At 10:21 a.m. ET, the Dow Jones Industrial Average .DJI
was down 74.66 points, or 0.26 percent, at 28,628.72, the S&P
500 .SPX was down 7.42 points, or 0.23 percent, at 3,238.86
and the Nasdaq Composite .IXIC was up 2.63 points, or 0.03
percent, at 9,074.09.
Market participants are also awaiting the fourth-quarter
reporting season, which begins in earnest next week. Earnings
for S&P 500 companies are expected to dip 0.5%, the second
consecutive quarter of decline, according to Refinitiv IBES
data.
Goldman Sachs Group Inc GS.N rose 1.3% after the Wall
Street bank said it has overhauled its main business units ahead
of its quarterly results next week. Shares in Apache Corp APA.N jumped 20.3% after it and
France's Total TOTF.PA said they made a major oil discovery
offshore Suriname with the closely watched Maka-Central 1 well.
Tesla Inc TSLA.O gained 2% after the company launched its
Model Y electric sports utility vehicle at its new Shanghai
factory. Declining issues outnumbered advancers for a 1.61-to-1 ratio
on the NYSE and a 1.38-to-1 ratio on the Nasdaq.
The S&P index recorded 24 new 52-week highs and one new low,
while the Nasdaq recorded 57 new highs and six new lows.