US STOCKS-S&P 500, Dow dip with energy; Nasdaq up after deal news

* Initial claims climb in latest week

* CPI (Other OTC: CPICQ - news) posts biggest drop since 2008

* Durable goods orders top expectations

* Salesforce.com climbs after results, outlook

* Indexes: Dow off 0.1 pct, S&P off 0.1 pt, Nasdaq up 0.2 pct (Updates to midday)

By Caroline Valetkevitch

NEW YORK, Feb 26 (Reuters) - The Dow and S&P 500 edged lower at midday on Thursday as energy shares eased back with oil prices, while the Nasdaq advanced after deal news in the technology sector.

Avago Technologies jumped 13 percent to $127.39 as the best performer on both the S&P 500 and Nasdaq 100 index after the company reached a deal to acquire Emulex for $8 per share. Emulex shares surged 25.8 percent to $8.

Apple (NasdaqGS: AAPL - news) shares also edged higher and were last up 0.8 percent at $129.77. Apple sent out an invite for a March 9 event, about one month before the much-anticipated launch of the new Apple (Swiss: AAPL.SW - news) Watch.

Energy shares were the among the biggest drags on the S&P 500 and Dow. The S&P 500 energy index was down 1.5 percent as crude oil futures fell on rising inventories in the United States.

After a sluggish start to the year, stocks have rebounded sharply in February. Both the Dow and S&P 500 are on track for their best monthly performance since October 2011, while the Nasdaq is on pace for its best month since January 2012.

"The action is very constructive in general. It's one of the strongest months in years for the S&P 500, the Nasdaq just a hair away from all-time highs, and we came up very far, very fast. But we've had a big move ... and you have to expect some profit-taking to come in," said Adam Sarhan, chief executive of Sarhan Capital in New York.

The Dow Jones industrial average fell 14.13 points, or 0.08 percent, to 18,210.44, the S&P 500 lost 2.84 points, or 0.13 percent, to 2,111.02 and the Nasdaq Composite added 10.83 points, or 0.22 percent, to 4,977.97.

The Nasdaq's all-time of 5,132.52 was hit in March 2000.

Economic data was mixed. January U.S. consumer prices had the biggest drop since 2008 as gasoline prices tumbled, while weekly jobless claims climbed last week and durable goods orders rose last month. The deflation data could provide a cautious Federal Reserve with leeway to keep interest rates low for a bit longer.

Salesforce.com shares climbed 10.9 percent to $69.74 after the cloud software company reported quarterly earnings and raised its full-year revenue forecast.

Transocean (LSE: 0QOW.L - news) shares advanced 1.2 percent to $16.75 after quarterly results.

Declining issues outnumbered advancers on the NYSE by 1,599 to 1,339, for a 1.19-to-1 ratio; on the Nasdaq, 1,384 issues rose and 1,194 fell, for a 1.16-to-1 ratio favoring advancers.

The S&P 500 was posting 33 new 52-week highs and two new lows; the Nasdaq Composite was recording 105 new highs and 14 new lows. (Editing by Bernadette Baum and Nick Zieminski)