US STOCKS-S&P 500, Dow dip as Middle East concerns persist; chips rally

* Micron gains on bullish brokerage update
* Energy stocks slide as oil drops 1%
* U.S. services sector activity better-than-expected in Dec
* Indexes: Dow off 0.37%, S&P down 0.22%, Nasdaq up 0.14%

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By Sruthi Shankar and Susan Mathew
Jan 7 (Reuters) - Oil stocks shed the most on the S&P 500 on
Tuesday, taking the benchmark index further away from record
highs, as investors nervously awaited the latest in the
U.S.-Iran standoff.
A near 2% loss for oil majors Exxon Mobil Corp XOM.N and
Chevron Corp CVX.N kept the blue-chip Dow Jones Industrial
Average .DJI also in the red, as oil prices surrendered some
of the gains made in the last few days. O/R
The tech-heavy Nasdaq remained buoyant as chipmakers resumed
their strong rally from 2019 on the back of positive company
updates.
Equity markets have been trying to shake off concerns from
escalating tensions between Washington and Tehran after the
killing of a top Iranian military commander by the United
States. After a record-setting New Year, last week's U.S. drone
strike that killed Iran's Qassem Soleimani jolted global stocks
that have been attempting to stabilize.
"Clearly, the headline concern is how and when Iran will
retaliate. But markets are taking it in their stride right now,"
said Ryan Detrick, senior market strategist for LPL Financial.
"There will likely be a retaliation, but hopefully the
impact on the overall global economy, specifically the U.S. will
not be enough to slow it down."
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 better than expected. The Philadelphia Semicondcutor index .SOX rose 2% helped
by Micron Technology Inc MU.O , which jumped 7.5% after
brokerage Cowen & Co upgraded the chipmaker to "outperform",
citing an earlier-than-expected recovery in the memory market.
Microchip Technology Inc MCHP.O rose 6.6% after raising
the mid-point of its third-quarter sales forecast.
At 1:08 p.m. ET the Dow Jones Industrial Average .DJI was
down 107.20 points, or 0.37%, at 28,596.18, the S&P 500 .SPX
was down 7.07 points, or 0.22%, at 3,239.21 and the Nasdaq
Composite .IXIC was up 13.09 points, or 0.14%, at 9,084.56.
Apache Corp APA.N soared 26.8% after it made a major oil
discovery, with France's Total SA TOTF.PA , off the coast of
Suriname. Declining issues outnumbered advancers for a 1.41-to-1 ratio
on the NYSE and a 1.15-to-1 ratio on the Nasdaq.
The S&P index recorded 36 new 52-week highs and one new low,
while the Nasdaq recorded 85 new highs and 12 new lows.