* Brent crude hits 26-month low on weak China data
* Indexes down: Dow 0.2 pct, S&P 0.3 pct, Nasdaq 0.9 pct
By Rodrigo Campos
NEW YORK, Sept 15 (Reuters) - U.S. stocks were falling on Monday, dragged down by the tech sector as investors make space in their portfolios for Alibaba's planned debut later this week and biotech shares weighed further on the Nasdaq.
Alibaba's could be the largest initial public offer in history and has seen "overwhelming" interest, meaning Yahoo's 23 percent stake could be worth more next week than it is now. Yahoo stock was up 1.7 percent with 1.9 million shares already traded.
"The Alibaba IPO is going to have a big effect, drawing money out of some stocks, and how it performs can help say a lot about the tech sector," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.
Among the most active stocks on the Nasdaq were Yahoo Inc , holder of a 23 percent stake in Alibaba, up 0.7 percent to $43.18; Avanir Pharma, up 54.2 percent to $10.39; and Apple Inc, up 0.3 percent to $101.96.
On the NYSE, Bank of America, up 0.24 percent to $16.83; Nokia Corp up 2.39 percent to $8.57; and Sprint Corp, down 1.43 percent to $6.90, were among the most actively traded.
The Dow Jones industrial average was falling 32.02 points, or 0.19 percent, at 16,955.49, the S&P 500 was losing 6.52 points, or 0.33 percent, at 1,979.02 and the Nasdaq Composite was dropping 39.60 points, or 0.87 percent, at 4,528.00.
The largest percentage gainer on the New York Stock Exchange was Alere Inc, rising 13.74 percent, while the largest percentage decliner was Furmanite Corp, down 12.27 percent.
Other active stocks include Molson Coors, up 6.7 percent at $76.61 after the Wall Street Journal reported that No. 1 brewer Anheuser-Busch InBev was talking to banks about financing a possible takeover bid of SABMiller .
The report comes a day after Dutch brewer Heineken said it was approached by SABMiller about a potential takeover.
Declining issues were outnumbering advancing ones on the NYSE by 1,910 to 844, for a 2.26-to-1 ratio on the downside; on the Nasdaq, 1,856 issues were falling and 525 advancing for a 3.54-to-1 ratio favoring decliners.
The broad S&P 500 index was posting 6 new 52-week highs and 5 new lows; the Nasdaq Composite was recording 19 new highs and 34 new lows. (Reporting by Rodrigo Campos; Editing by Chizu Nomiyama and Nick Zieminski)