(Updates to late morning)
* Auto sales fall short of expectations
* Best Buy climbs after results
* Citigroup to sell OneMain Financial to Springleaf Holdings
* Indexes off: Dow 0.7 pct, S&P 0.8 pct, Nasdaq 0.9 pct
By Chuck Mikolajczak
NEW YORK, March 3 (Reuters) - U.S. stocks fell on Tuesday, as the Dow and S&P retreated from their latest records and the Nasdaq dipped below 5,000 after scaling the milestone level for the first time in 15 years.
Investors exercised caution after a strong run for major indexes in February and ahead of a slew of economic data later this week, culminating with the monthly payrolls report. Disappointing auto sales also gave a reason to pause.
"To the extent that you are taking a breather, it's not predicated on the fact we are crossed a round number on the Nasdaq. It's predicated on the fact that when you get up around new highs market participants tend to get a little vertigo," said Art Hogan, chief market strategist at Wunderlich Securities in New York.
"The air gets a little thin up at new highs and you need a driver to keep it going, and one of the things we are not getting as a driver today is solid auto sales."
For the second year in a row, tough winter weather slowed U.S. vehicle sales in February, with several major automakers missing analysts' projections and dampening bullish expectations.
U.S.-listed Fiat Chrysler shares lost 3.7 percent to $15.25 while Ford Motor declined 2.4 percent to $16.18. General Motors managed to edge 0.1 percent higher at $37.65.
Electronics retailer Best Buy advanced 0.8 percent to $38.95 after it reported quarterly results, announced a special dividend and the resumption of its share repurchase plan.
The Dow Jones industrial average fell 130.75 points, or 0.71 percent, to 18,157.88, the S&P 500 lost 15.82 points, or 0.75 percent, to 2,101.57 and the Nasdaq Composite dropped 44.93 points, or 0.9 percent, to 4,963.17.
Citigroup edged up 0.6 percent to $53.83 after it agreed to sell its consumer finance unit OneMain Financial Holdings Inc to subprime lender Springleaf Holdings Inc for $4.25 billion in cash. Springleaf shares surged 36.5 percent to $48.13.
Mylan Inc fell 3.3 percent to $55.98. The generic drug maker gave its 2015 outlook and said it may look for another acquisition after completing a deal for some of Abbott Laboratories' non-U.S. businesses just last week.
MannKind Corp tumbled 9.6 percent to $6.00 after Goldman Sachs cut its rating on the drugmaker to "sell" from "neutral" and slashed its price target to $3 from $6 per share.
Declining issues outnumbered advancing ones on the NYSE by 1,853 to 1,064, for a 1.74-to-1 ratio; on the Nasdaq, 1,687 issues fell and 876 advanced, for a 1.93-to-1 ratio favoring decliners.
The S&P 500 was posting 8 new 52-week highs and no new lows; the Nasdaq Composite was recording 53 new highs and 20 new lows. (Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama and Nick Zieminski)