* Apple dips on report of iPhone X production cut
* High Treasury yields weigh on defensive sectors
* Dr Pepper Snapple jumps on news of Keurig deal
* Indexes down: Dow 0.7 pct, S&P 0.7 pct, Nasdaq 0.5 pct (Updates to market close)
By Stephen Culp
NEW YORK, Jan 29 (Reuters) - Wall Street pulled back from record highs on Monday, with the Dow and the S&P 500 indexes marking their biggest one-day percentage declines in about five months, weighed down by a slide in Apple shares.
Shares of Apple fell 2.1 percent on news that the company will halve production of its $999 iPhone X smartphone. The company is due to report earnings on Thursday.
"The market's responding to the question of what Apple's earnings are going to look like, specifically what kind of guidance are they going to give on iPhone X sales," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
The S&P technology index fell 0.9 percent and was the biggest drag on the benchmark index following Wall Street's strongest four-week run since 2016.
The Cboe Volatility Index, the most widely followed barometer of expected near-term volatility for U.S. stocks, closed up 2.76 points, or nearly 25 percent, at 13.84, its highest close since Aug. 18.
"We've had a long run in the stock market, and we've seen some unease, but that could be reversed with a couple of good days," said Hellwig.
Benchmark U.S. 10-year Treasury note yields hit their highest since 2014 due to economic strength, which added to pressure on defensive sectors such as utilities, real estate and telecoms.
The Dow Jones Industrial Average fell 177.23 points, or 0.67 percent, to 26,439.48, the S&P 500 lost 19.34 points, or 0.67 percent, to 2,853.53 and the Nasdaq Composite dropped 39.27 points, or 0.52 percent, to 7,466.51.
The Dow and S&P 500 had their biggest daily percentage declines since Sept. 5. The S&P 500 still is up 6.7 percent since the end of 2017.
It was a rocky start to an action-packed week, which will feature U.S. President Donald Trump's first official State of the Union speech late Tuesday.
Also ahead this week is the Federal Reserve's meeting, the U.S. employment report and earnings from a host of high-profile names including Amazon.com, Alphabet and Facebook.
Fourth-quarter earnings growth for the S&P 500 is now seen at 13.2 percent, up from 12 percent at the beginning of the year, according to Thomson Reuters data. Of the companies that have reported, about 80 percent have beaten Wall Street expectations.
Aside from higher yields, telecom stocks also slipped on reports that the U.S. government was considering building a 5G wireless network to guard against spying.
AT&T was down 1.5 percent, Verizon slipped 1.1 percent and Sprint pulled back by 1.9 percent.
Dr Pepper Snapple Group jumped to an all-time high after K-cup maker Keurig Green Mountain said it will buy the company in a deal worth more than $21 billion. The stock ended up 22.4 percent at $117.07.
Declining issues outnumbered advancing ones on the NYSE by a 4.65-to-1 ratio; on Nasdaq, a 2.16-to-1 ratio favored decliners.
The S&P 500 posted 126 new 52-week highs and three new lows; the Nasdaq Composite recorded 153 new highs and 29 new lows.
About 7.1 billion shares changed hands on U.S. exchanges. That compares with the 6.9 billion daily average for the past 20 trading days, according to Thomson Reuters data. (Reporting by Stephen Culp; Additional reporting by Saqib Iqbal Ahmed; Editing by Nick Zieminski and James Dalgleish)