NEW YORK (Mar 25): U.S. stocks fell in choppy, tight-range trading on Wednesday, with indexes reacting to moves in currency markets and to a gauge of industrial orders that unexpectedly fell last month.

A drop in durable goods orders pushed the dollar index lower , giving initial support to equities as it eases fears that the rally in the U.S. currency will hurt corporate earnings. However, with valuations stretched as stock indexes trade near record highs, weak economic data is not welcome.

"The dollar strength can sap earnings growth, but if you continue to see soft economic data here, a confirmation of decelerating growth, that will certainly affect the market," said Chad Morganlander, portfolio manager at Stifel, Nicolaus & Co in Florham Park, New Jersey.

He said, with the S&P 500's forward price-to-earnings ratio above 17 and at its highest since late 2007, "you have to torture the numbers to make a bull case at this point."

At 11:15 a.m. EDT (1515 GMT), the Dow Jones industrial average fell 63.52 points, or 0.35 percent, to 17,947.62, the S&P 500 lost 3.06 points, or 0.15 percent, to 2,088.44 and the Nasdaq Composite dropped 33.98 points, or 0.68 percent, to 4,960.75.

The S&P traded in a range of 10.2 points, far below the average of 19.4 in the past 20 sessions. It crossed the unchanged line more than a dozen times in morning trading.

The dollar index was down 0.2 percent after falling earlier as much as 0.7 percent.

The Nasdaq underperformed due to declines in biotechnology and semiconductor stocks. The Nasdaq Biotech index fell 2.2 percent, dropping more than 5 percent this week so far, after a string of six consecutive weekly gains totaling more than 16 percent.

Kraft Foods jumped 42 percent to $86.90 after a merger agreement with ketchup maker H.J. Heinz Co, owned by 3G Capital and Berkshire Hathaway. Kraft Heinz Co will trade publicly and will be the third-largest food company in North America.

Kofax Ltd rallied 46 percent to $10.94 after Lexmark International, known for its printers, said it would buy Kofax in a deal of about $1 billion that would double the size of its enterprise software business. Lexmark shares jumped 6 percent to $43.22.

Declining issues outnumbered advancing ones on the NYSE by 1,525 to 1,344, for a 1.13-to-1 ratio; on the Nasdaq, 1,744 issues fell and 786 advanced, for a 2.22-to-1 ratio favoring decliners.

The benchmark S&P 500 was posting 10 new 52-week highs and 1 new low; the Nasdaq Composite was recording 53 new highs and 16 new lows.