* S&P, Nasdaq sag, but well off lows as investors buy on the dip
* P&G shares climb after CEO replacement
* Fed's possible stimulus exit keeps investors nervous
* Dow up 0.1 pct; S&P 500 off 0.1 pct, Nasdaq off 0.1 pct
By Angela Moon
NEW YORK, May 24 (Reuters) - U.S. stocks mostly declined for a third day on Friday, putting indexes on track for their first negative week since mid-April, on lingering concern that the U.S. central bank may scale back its stimulus measures to support the economy.
A jump in April orders for long-lasting manufactured goods, such as refrigerators and toasters, painted an encouraging economic picture.
"A day like today is clear evidence that there is still money on the sideline to get into equities, (and investors are) looking for almost any excuse to get in," said Tim Ghriskey, chief investment officer of Solaris Asset Mangment in Bedford Hills, New York.
"This has been happening all week. Investors are taking advantage of down days to put more cash to work, especially when the decline is not based on something fundamental."
Trading has been choppy in the second half of the week as market participants assess the Federal Reserve's evolving stance toward markets. The Fed's stimulus measures have been instrumental in a rally that has driven U.S. stocks to record highs this year.
Even as there is some fear that the Fed will exit too soon, many analysts say the eventual tapering of the central bank's stimulus will come with an expansion of the economy and corporate earnings, which will continue to support equities.
"A lot of people have only been giving the Fed credit for this rally and not been talking about some of the improvement in the labor market or housing data," said Joe Bell, a senior equity analyst at Schaeffer's Investment Research in Cincinnati.
"The economy in general has been on a lot better footing than perhaps people have given it credit for."
The Dow Jones industrial average was up 10.23 points, or 0.07 percent, at 15,304.73. The Standard & Poor's 500 Index was down 1.30 points, or 0.08 percent, at 1,649.21. The Nasdaq Composite Index was down 3.04 points, or 0.09 percent, at 3,456.37.
The three major U.S. stock indexes were on track to post their first negative week in five.
Procter & Gamble shares rose 3.7 percent to $81.60 after the world's largest household products maker brought back A.G. Lafley as chief executive Thursday, replacing Bob McDonald in the midst of a major restructuring.
Tesla jumped 4.7 percent to $97.04 after rising as high as $97.95. At the same time, shares borrowed as a percentage of outstanding shares fell to 12.3 percent as of Thursday, according to data from Markit. That's well off a level of more than 20 percent that was seen just a few weeks ago.
A wave of short-covering earlier in the month drove huge gains in Tesla. The stock's price has more than doubled since the beginning of April.
Abercrombie & Fitch (NYSE: ANF - news) was among the S&P 500's biggest losers after the teen clothing retailer cut its profit forecast and said quarterly comparable sales fell 15 percent, which it blamed in part on inventory shortages. Its stock lost 7.1 percent to $50.53.
Shares of Sears Holdings (NasdaqGS: SHLD - news) sank 14.1 percent to $49.96 after the U.S. retailer reported a bigger-than-expected quarterly loss on Thursday. Sears said cooler spring weather hurt its results.
Since Wednesday, the markets have been focused on the possibility that the Fed's $85 billion per month in bond purchases will be scaled back later this year, in the wake of recent congressional testimony by Fed Chairman Ben Bernanke and the minutes from the Federal Open Market Committee's latest meeting.
The minutes showed a degree of fracture among the FOMC's members "in terms of the approach moving forward, specifically the time frame" of the unwinding of the Fed's stimulus efforts, said Peter Kenny, chief market strategist at Knight Capital (NYSE: KCG - news) in Jersey City, New Jersey.
Durable goods orders rose 3.3 percent in April, exceeding expectations for an increase of 1.5 percent. The data suggested that a sharp slowdown in factory output could soon run its course.