(Updates to afternoon, commentary)
* Auto sales fall short of expectations
* Netanyahu warns Obama against Iran deal
* Technology stocks fall after Nasdaq milestone
* Indexes off: Dow 0.45 pct, S&P 0.48 pct, Nasdaq 0.64 pct
By Sinead Carew
NEW YORK, March 3 (Reuters) - U.S. stocks fell on Tuesday, a day after S&P and Dow hit records and Nasdaq retreated after hitting a 15-year milestone after soft car sales data and Iran commentary worried some investors.
The decline followed a strong run-up for major indexes in February and ahead of a slew of economic data later this week, culminating with the monthly payrolls report.
For the second year in a row, tough winter weather slowed U.S. vehicle sales in February, with several automakers missing analysts' projections. U.S.-listed Fiat Chrysler shares fell 3 percent to $15.32 while Ford Motor declined 2.5 percent to $16.16.
Around mid-morning, Israeli Prime Minister Benjamin Netanyahu warned U.S. President Barack Obama against accepting a nuclear deal with Iran that he said would be a "countdown to a potential nuclear nightmare" by a country that "will always be an enemy of America."
His highlighting of risks in the Middle East caused stocks to dip further on a day when people are also taking profits after Nasdaq hit the 5,000 milestone, said Seth Setrakian, partner and co-head of U.S. equities at First New York Securities in New York.
"People are more in a buyers' strike because they don't want to put new money to work here but aren't looking to the exits and selling," he said.
Indexes pared losses in the afternoon but technology stocks were hit most noticeably as investors took profits after the Nasdaq milestone, Setrakian said.
Microsoft Corp weighed most on the Nasdaq with an 1.3 percent decline to $43.29, followed by Cisco Systems , which fell 2 percent giving back most of its gains from the day before. Seagate Technology and Micron Technology were the worst performers in the S&P 500.
The Dow Jones industrial average fell 82.17 points, or 0.45 percent, to 18,206.46, the S&P 500 lost 10.14 points, or 0.48 percent, to 2,107.25 and the Nasdaq Composite dropped 32.01 points, or 0.64 percent, to 4,976.08.
Utilities and energy were the only two of ten S&P 500 sectors that were positive. Energy stocks rose 0.6 percent as oil rebounded after Netanyahu's comments and rival Libyan forces carried out air strikes on oil terminals and an airport.
Mylan Inc fell 4.5 percent to $55.30. The generic drug maker gave its 2015 outlook and said it may look for another acquisition after just completing a purchase of some of some overseas Abbott Laboratories' businesses last week.
MannKind Corp tumbled 8.7 percent to $6.06 after Goldman Sachs cut its rating on the drugmaker to "sell" from "neutral" and slashed its price target to $3 from $6 per share.
NYSE Decliners outnumbered advancers 1,818 to 1,193, for a 1.52-to-1 ratio; on the Nasdaq, 1,744 issues fell and 954 advanced, for a 1.83-to-1 ratio.
The S&P 500 was posting 9 new 52-week highs and no new lows; the Nasdaq Composite was recording 63 new highs and 27 new lows. (Additional reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama and Nick Zieminski)