* Commodity-related shares fall on China tightening fears
* Boeing drops on downgrade; Intel gains on div boost
* Indexes off: S&P 1.1 pct, Dow 0.8 pct, Nasdaq 1.2 pct (Updates to midday, changes byline)
By Ryan Vlastelica
NEW YORK, Nov 12 (Reuters) - U.S. stocks dropped and were on track to end a five-week winning streak on Friday as expectations of an interest rate hike in China hit commodity prices and weighed on energy and natural resource stocks.
The Shanghai Composite Index notched its biggest percentage loss in over a year on the likelihood China's central bank was set to raise rates to tackle inflation, a move that could pressure future growth.
Commodities fell broadly, with crude oil futures down 2.7 percent and copper off 2.2 percent. That weighed on cyclical stocks, with aluminum producer Alcoa Inc the top percentage loser among Dow components, slumping 2.8 percent to $13.42.
Also on the Dow, Exxon Mobil Corp was off 1.6 percent to $70.66, while heavy machinery maker Caterpillar Inc was down 2 percent to $80.87. The S&P energy index was off 1.6 percent, while the materials index lost 2.2 percent.
"The whole commodity complex is exceptionally weak after the overnight action in China, and we need to see how it all plays out," said Tom Samuels, managing partner at Palantir Capital Management in Houston. "This may be the first seed of doubt about the healing power of (quantitative easing)."
The Dow Jones industrial average was down 85.83 points, or 0.76 percent, at 11,197.27. The Standard & Poor's 500 Index was down 13.31 points, or 1.10 percent, at 1,200.23. The Nasdaq Composite Index was down 29.44 points, or 1.15 percent, at 2,526.08.
Boeing Co also pressured the Dow, shedding 2.4 percent to $63.78 after Sanford C. Bernstein cut the stock to "market perform," citing more potential delays for its 787 Dreamliner.
Stocks have stalled in recent sessions after a two-month rally that climaxed last week, when the Dow and Nasdaq hit levels not seen since the collapse of Lehman Brothers more than two years ago.
Worries that Ireland may default on its debt as well as declines in commodity prices and an unexpectedly weak outlook from Cisco Systems Inc helped cloud the market outlook, though some investors said the underlying trend is strong.
"We're in a post-Fed and post-election environment, and stocks are waiting to see what the next mover is going to be," said Andy Fitzpatrick, director of investments at Hinsdale Associates in Hinsdale, Illinois. "In the meantime, markets are distracted by Europe and China."
Helping the Dow, Intel Corp rose 1.7 percent to $21.57 after the chipmaker boosted its dividend.
In other corporate news, Nvidia Corp jumped 4.8 percent to $13.23 after the graphics chipmaker forecast higher sales for the current quarter.
D.R. Horton Inc fell 3.9 percent to $11.69 after the biggest U.S. homebuilder said orders fell, even as it reported a narrower quarterly loss.
J.C. Penney Co Inc was off 1.6 percent to $31.71 after the department store retailer said discounting boosted sales but ate into margins. At the same time, Dillard's Inc surged more than 12 percent $31.48 after its results.