(Corrects paragraph 4 to show best stocks on Nasdaq 100 and S&P 500)
* Profit-taking hits 2013's best performing stocks; techs down
* Obama shows flexibility on short-term debt limit hike
* Boehner: There's no line in the sand
* Indexes down: Dow 0.51 pct, S&P 0.65 pct, Nasdaq 1.34 pct
By Julia Edwards
NEW YORK, Oct 8 (Reuters) - U.S. stocks dipped on Tuesday, with the year's biggest gainers taking the hardest hits, as the lack of tangible signs of resolution of the fiscal crisis in Washington prompted a flurry of selling.
The technology sector was the biggest loser on the S&P 500, with investors seeming to target stocks that have outperformed throughout the year and even held up well as the broader market has come under pressure in the last couple of weeks.
"Given all the uncertainty and anxiety about what could happen with the debt ceiling, investors want to take profits, and these are the ones that have seen some of the biggest gains this year," said Donald Selkin, chief market strategist at National Securities in New York, which has about $3 billion in assets under management.
Facebook was the biggest drag on the Nasdaq, down 3.4 percent to $48.38. Shares of TripAdvisor lost 6 percent to $71.35 a share, and Netflix fell 4.8 percent to $303.11. Both TripAdvisor and Netflix are among the top performers this year on the S&P 500, and Facebook is among the top performers on the Nasdaq 100.
"All of the sudden, you've got these question marks coming in from earnings reports and the government shutdown and you've got these portfolio managers saying, 'What is left here for me to keep my neck out? Why not take some profit?'" said Daniel Morgan, senior portfolio manager at Synovus Trust Company in Atlanta.
The Dow Jones industrial average was down 76.67 points, or 0.51 percent, at 14,859.57. The Standard & Poor's 500 Index was down 10.86 points, or 0.65 percent, at 1,665.26. The Nasdaq Composite Index was down 50.51 points, or 1.34 percent, at 3,719.87.
Republican House Speaker John Boehner renewed calls to President Barack Obama to have a conversation with his party at a press conference on Tuesday morning. Boehner, flanked by Republican leadership, said "there is no line in the sand" drawn by his party over fiscal negotiations.
With the partial U.S. government shutdown in its second week and only nine days left for Congress to raise the U.S. debt ceiling, President Barack Obama said he would accept a short-term increase to avoid a default.
A Senate aide said Republican Senator Rob Portman, who is influential on budget matters, floated a plan to cut federal spending and reform the U.S. tax code as part of a broader deal to reopen government agencies and raise the debt ceiling.
The longer the government shutdown continues, the greater the damage to the economy, according to analysts, increasing the probability the Federal Reserve will leave its stimulus measures in place.
After Tuesday's market close, former Dow component Alcoa Inc will report earnings, as will KFC parent company Yum! Brands Inc.
McKesson shares rose 4.3 percent to $135.23 as the best performer on the S&P 500 after Dow Jones Newswires reported the company was in advanced talks to take over Celesio in a possible 3.74 billion euro ($5.08 billion) deal.
J.C. Penney Co Inc rose 4.2 percent to $8.03 after the struggling retailer reported a smaller decline in same-store sales for September compared with August and said it was seeing positive signs in many areas of its business. (Editing by Nick Zieminski)