* Factory orders fall shy of estimate
* Oracle to buy Acme Packet for $1.9 billion
* Indexes off: Dow 0.7 pct, S&P 0.6 pct, Nasdaq 0.5 pct
NEW YORK, Feb 4 (Reuters) - U.S. stocks fell on Monday after a disappointing report on factory orders, retreating from gains in the prior session that left the S&P 500 at a five-year high and the Dow above 14,000.
Chevron and Wal-Mart were among the biggest drags on the Dow after analyst downgrades.
The gains on Friday left the benchmark S&P 500 roughly 60 points away from its all-time intraday high of 1,576.09 while the Dow's march above 14,000 was the highest for the index since October 2007.
The benchmark S&P index is up 5.5 percent for the year, with nearly half of the gains coming in the session after U.S. legislators successfully sidestepped temporarily the "fiscal cliff" of automatic tax increases and spending cuts, which threatened to derail the economic recovery.
"We should get a pullback. Markets have been on a tear and they have been on a tear for good, sound economic and earnings-driven reasons," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
Data from the Commerce Department showed overall factory orders rose 1.8 percent during the month, below the median forecast of 2.2 percent by analysts polled by Reuters, in a possible sign companies may be losing faith in the economy's recovery over concerns about deficit reduction measures that could slow the economy.
Economic data has pointed to a modest U.S. recovery, but the data has not been strong enough to upset investor expectations the Federal Reserve will continue its stimulus policy that has buoyed stocks.
"We are right on that razor's edge, so to speak, where there is not enough robust profile in the economic data to suggest the Fed needs to change policy, but at the same time people are aware that there is a shelf life on this policy and as we continue to sit on that fence, the markets move higher," said Kenny.
Shares of household products company Clorox rose 1.3 percent to $80.17 after the company's quarterly profit beat analysts' estimates as a severe flu season boosted sales of disinfecting wipes.
Earnings are due from Anadarko Petroleum Corp and Yum! Brands Inc, owner of fast-food chains, after the closing bell.
The Dow Jones industrial average dropped 100.00 points, or 0.71 percent, to 13,909.79. The Standard & Poor's 500 Index lost 9.35 points, or 0.62 percent, to 1,503.82. The Nasdaq Composite Index declined 15.13 points, or 0.48 percent, to 3,163.97.
According to Thomson Reuters data, of the 256 companies in the S&P 500 that have reported earnings through Monday morning, 68.4 percent have reported earnings above analyst expectations compared with the 62 percent average since 1994 and the 65 percent average over the past four quarters.
S&P 500 fourth-quarter earnings are expected to rise 4.4 percent, according to the data. That estimate is above the 1.9 percent forecast at the start of earnings season, but well below the 9.9 percent fourth-quarter earnings forecast on Oct. 1.
Chevron Corp dipped 1.1 percent to $115.18 after UBS cut its rating on the Dow component to neutral." while Wal-Mart Stores Inc shed 1.6 percent to $69.37 after JP Morgan lowered its rating on the world's largest retailer to "neutral" and reduced its price target to $75 from $84 per share.
Oracle Corp lost 1.1 percent to $35.81 after the company agreed to buy network gear maker Acme Packet Inc for about $1.9 billion. Acme Packet shares surged 22.5 percent to $29.30.
Herbalife Ltd slumped 6.5 percent to $32.80 after The New York Post reported the seller of weight loss products is facing a probe by the Federal Trade Commission. Herbalife has been in the spotlight since December when activist hedge fund manager William Ackman revealed he held a short position. The stock was on track for its sixth straight decline.