US STOCKS-Dow and S&P 500 up, Nasdaq dips after factory data

* ISM manufacturing index exceeds forecast

* Chevron (Berlin: CHV.BE - news) falls after weak revenue, weighing on Dow

* Dow up 0.3 pct, S&P 500 up 0.2 pct, Nasdaq down 0.1 pct

By Luke Swiderski

NEW YORK, Nov 1 (Reuters) - Major U.S. stock indexes were mixed in afternoon trading on Friday as investors took October's surprisingly strong manufacturing data as a potential sign the Federal Reserve could reduce its stimulus earlier than expected.

Manufacturing activity expanded around the world, several business surveys showed, with Chinese manufacturers reporting the fastest upturn in 18 months. The Institute for Supply Management (ISM) said on Friday its index of U.S. factory activity rose to 56.4 in October, its best reading since April 2011.

Normally such news would send stocks up, but the Dow and the S&P 500 are not far from highs reached earlier this week, and investors are now thinking about how this affects the Fed's $85 billion in monthly bond purchases. The Fed's stimulus has given buyers a reason to invest in riskier assets like stocks.

"I'm actually surprised the market's held up," said Daniel Stecich, senior vice president and director of economic research at Athena Advisor Services.

Shares of Chevron Corp fell 2.4 percent to $117.60, accounting for about 15 points of negative drag on the Dow Jones industrial average, after third-quarter revenue came in below expectations.

The S&P Energy Index slipped 0.6 percent to 325.66 on falling oil prices. Light (Other OTC: LGSXY - news) crude fell 1.5 percent to $94.84 a barrel and Brent crude fell 2 percent to $106.65 a barrel.

"I think overall you have a market that is consolidating," said Quincy Krosby, market strategist with Prudential Financial (NYSE: PJH - news) , referring to when a market trades in a range following a series of strong gains.

The Dow Jones industrial average rose 53.94 points or 0.35 percent, to 15,599.69, the S&P 500 gained 2.81 points or 0.16 percent, to 1,759.35 and the Nasdaq Composite dropped 4.573 points or 0.12 percent, to 3,915.133.

American International Group Inc fell 5.7 percent to $48.69, making it the S&P 500's biggest loser, a day after the insurer reported earnings that slightly beat expectations. However, analysts expected better results in the insurer's consumer lines business and said it benefited from a favorable tax rate this most recent quarter.

Boeing Co (NYSE: BA - news) shares gained 1.4 percent to $132.47. On Thursday, Boeing said it would increase production of its 737 aircraft to 47 planes per month by 2017 from 38 now - a move that analysts said bodes well for the company.

With about 74 percent of S&P 500 companies having reported earnings, 68.5 percent have topped Wall Street's expectations, above the long-term average of 63 percent, according to Thomson Reuters data. However, only 53.3 percent have topped revenue forecasts, below the 61 percent average since 2002.

First Solar Inc (Xetra: F3A.DE - news) soared 15.9 percent to $58.30 a day after the U.S. solar panel manufacturer's results beat forecasts and the company raised its full-year profit outlook.