* Factory orders increase in July, Beige Book on tap
* Automakers post strong August sales
* Dow up 0.23 pct, S&P flat, Nasdaq off 0.47 pct (Updates to midday)
By Chuck Mikolajczak
NEW YORK, Sept 3 (Reuters) - The key Nasdaq index fell on Wednesday as a drop in Apple shares pulled down the technology sector, while earlier gains in the broader S&P 500 dissipated amid uncertainty over ceasefire negotiations between Ukraine and Russia.
Apple shares were down 4.1 percent at $99.02, falling below the $100 mark for the first time since August and on track for its worst percentage decline since Jan. 28 as it grappled with a possible security breach into its iCloud service a week before a crucial launch of its new iPhone.
The decline dragged down the Nasdaq and weighed on the technology sector which lost 0.6 percent as the worst performing of the 10 major S&P groups.
The benchmark S&P index reached a record intraday high of 2,009.28, while the Dow moved within two points of a new record after comments from Ukraine and Russia’s Vladimir Putin indicated a political solution to the conflict between the two countries could be on the horizon.
“The market actually responded well to the strong gains that Europe had on the news of the ceasefire between Ukraine and Russia but there is a lot there that is left to be to be desired,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
Also providing early support was the latest data that pointed to an improving U.S. economy as new orders for manufactured goods increased a record 10.5 percent in July. June’s orders were revised to show a 1.5 percent increase instead of the previously reported 1.1 percent rise.
Investors will look to the release of the Fed’s Beige Book of economic activity across the nation at 2:00 p.m. (1800 GMT) for insight into the central bank’s opinion of the strength of the economy and interest rate policy.
The Dow Jones industrial average rose 39.54 points or 0.23 percent, to 17,107.1, the S&P 500 lost 0.02 points or flat, to 2,002.26 and the Nasdaq Composite dropped 21.39 points or 0.47 percent, to 4,576.80.
Russia’s dollar-denominated RTS index jumped 5.2 percent while the rouble-based MICEX index gained 3.5 percent. The rouble rose 1.6 percent against the dollar to 36.86.
August auto sales were unexpectedly strong, due in part to heavy discounting by the manufacturers, with the industry selling at an annualized pace not seen since early 2006. General Motors, which narrowly missed expectations, slipped 0.6 percent to $34.59 while Ford Motor shed 0.4 percent to $17.53.
Housing stocks were a weak spot, weighed down by a 4 percent decline in Toll Brothers to $34.21 after the largest U.S. luxury homebuilder posted quarterly results. The PHLX housing index lost 1.4 percent. (Editing by Bernadette Baum and Nick Zieminski)