(Updates to close) By Anna Driver NEW YORK, Jan 3 (Reuters) - Stocks fell on Monday -- the first trading day of 2005 -- after disappointing U.S. employment and construction spending data triggered concern about economic growth and lower crude oil prices pulled down energy shares. A brokerage downgrade of network computer maker Sun Microsystems hurt technology shares. Sun Micro fell 5.2 percent to $5.11 after Sanford Bernstein cut its rating to "underperform." Exxon Mobil Corp. fell 2.3 percent to $50.08, while ChevronTexaco Corp. was down 3 percent to $50.90. Crude oil prices fell $1.33 to $42.12 a barrel as mild winter weather hurt demand for heating oil demand. The Dow Jones industrial average was down 53.58 points, or 0.50 percent, at 10,729.43 and the Standard & Poor's 500 Index was down 9.84 points, or 0.81 percent, at 1,202.08. The Nasdaq Composite Index was down 23.29 points, or 1.07 percent, at 2,152.15. All three gauges posted their largest one-day percentage declines in about 3 weeks. Trading was active, with 1.5 billion shares changing hands on the New York Stock Exchange and about 2.2 billion shares were traded on Nasdaq. Stocks on the decline outnumbed those on the rise by about 3-to-1 on the NYSE. On Nasdaq, advancing issues outpaced decliners by about 2-to-1. "The market has been pricing in fairly healthy economic growth and earnings for the next year," Gordon Fowler, chief investment officer for the Glenmede Trust Company in Philadelphia, said. "We're in a situation where the market is vulnerable to any sort of negative news." In 2004, stocks rallied after the U.S. presidential election in November. For the year, the Dow ended up 3.2 percent, Nasdaq ended 8.6 percent higher and the S&P advanced 9 percent. Monday's economic data indicating a weaker jobs outlook and lower-than-expected construction spending spurred investors to lock in gains. The Institute for Supply Management said its index of national manufacturing activity rose to 58.6 in December from 57.8 in November, with an increase in new orders. But the ISM's employment index fell to a 14-month low. Construction spending fell unexpectedly by 0.4 percent in November as a cooling in residential construction overpowered a small rise in public spending, according to government data. The report dragged down shares of construction equipment makers Caterpillar Inc., which was down 2.5 percent at $95.07, and Cummins Inc., which dropped 1.8 percent to $82.30. Wal-Mart Stores Inc., the world's biggest retailer, rose 1 percent to $53.35 after it said sales rose 3 percent last month at U.S. stores open at least a year -- higher than its forecast a week ago -- due to a late surge in holiday shopping.
