Derry City's six match unbeaten run on the road ended at Oriel Park
Dundalk 2 Derry City 1
DERRY CITY's six match unbeaten run on the road under Ruaidhri Higgins came to an end at Oriel Park despite a brave second half performance.
The victory moved Dundalk two points above Derry into sixth spot at the midway point of the season after 18 games.
Daniel Kelly gave Dundalk the lead on 37 minutes after Michael Duffy's 30 yard strike was turned into his path by Nathan Gartside.
The City keeper had made a spectacular save moments before to deny Pat Hoban's header but Dundalk were good value for the lead.
Higgins rang the changes at the start of the second half with a double substitution and changed to an offensive 3-5-2 formation.
However, the Candy Stripes were unfortunate to concede a penalty on 56 minutes when substitute Darren Cole was adjudged to handle inside the box.
Pat Hoban tucked away the penalty to double Dundalk's lead but Derry fought to the end inspired by skipper Eoin Toal's 60th minute header.
Derry have garnered nine points from losing positions in the league this season but despite dominating the ball in the second half City came up short.
It ended an eight match unbeaten run for the Candy Stripes but Higgins will take plenty of encouragement from this display.
Derry began life without top scorer Will Patching who was unable to play against his parent club as the ex-Man City Academy star prepares for his return to Oriel Park next week.
In came Joe Thomson as his replacement in an otherwise unchanged team from last Monday night's draw against Sligo Rovers with Higgins opting for an attacking 4-4-2 formation.
Skipper Eoin Toal was rated doubtful for the match having sustained a hip injury in that game but he passed a late fitness test.
Dundalk captain Sheilds was handed a start at centre half by Vinny Perth for his swansong after nine years with the Co. Louth club ahead of his move to Linfield.
Perth made two changes from the team which won their first game under the new boss last with Sam Stanton and Sean Murray back in the team at the expense of Sonni Nattestad and Greg Sloggett who dropped to the bench.
Dundalk raced out of the traps and after sustained early pressure McEleney fired a decent strike from distance narrowly over the crossbar after five minutes.
Derry settled into the game but a misplaced Danny Lafferty pass was intercepted by Sean Murray who slipped it into the path of Hoban and his cross from a tight angle was palmed away by Gartside.
McEleney played a neat pass into Murray who made his way into the penalty area before testing Gartside with a low shot but the City keeper saved at the second attempt on 24 minutes.
A deflected strike from Michael Duffy was headed goalwards by Hoban from 12 yards and Gartside turned it behind superbly at full stretch for a corner.
Derry had an opportunity to get in behind the Dundalk defence for the first time when James Akintunde did brilliantly to get away from Jurkovskis before playing Parkhouse through on goal but the flag went up for offside.
Straight up the other end Hoban rose above Toal to met a cross from the left and Gartside produced a spectacular save as he got a strong hand to the ball and turned around the post.
Less than 60 seconds after that stunning save it was a mistake from the Derry keeper which gifted Dundalk the lead.
Duffy skilfully nutmegged Harkin before firing a low strike from 30 yards which was turned into the path of Kelly by Gartside and the Dundalk winger made no mistake from four yards.
With less than a minute before the break Kelly gave away a free-kick right on the edge of the penalty area when handling Lafferty's cross.
However, Thomson's low free-kick failed to fool Alessio Abibi who saved comfortably.
Higgins made a double substitution at the interval with Parkhouse and Malone replaced by Darren Cole and Ciaran Coll as Derry changed to a 3-5-2 formation with Fitzgerald joining Akintunde up top.
It was a positive change and from a positive move on the right Thomson crossed dangerously towards the back post but Lafferty couldn't steer it goalwards.
Harkin conceded possession inside Derry's half on 56 minutes and the visitors were almost punished as McEleney found Duffy who forced a save from Gartside.
Moments later Jurkovski's overhead kick hit the hand of Cole and referee Rob Harvey pointed to the spot.
Up stepped Hoban to tuck away the penalty confidently to double Dundalk's lead.
A brave block by Andy Boyle deflected Thomson's close range strike over the bar as Derry responded well.
From the resultant corner Thomson delivered into the six yard box and Toal rose to power his header home to half the deficit on the hour mark.
Thomson fired over the bar from a clever Cole cutback as Derry sensed a comeback.
And from a quick counter Duffy was clean through on goal but Toal recovered with a magnificent tackle just as the former City winger was about to pull the trigger.
Substitute Han Jeongwoo latched onto Duffy's pass on 70 minutes and his low strike went narrowly past the far post.
Gartside stood tall to block Duffy's strike from the angle with 10 minutes to go.
Derry striker Patrick Ferry came off the bench to replace Harkin for the final throw of the dice for Higgins.
Donegal youngsters Boyce and Ferry combined on the right flank with the latter firing his well struck volley into the side netting with four minutes left on the clock.
Derry rallied but couldn't find the equaliser as they fell to their first defeat on the road under Higgins.
Dundalk: A. Abibi; R. Jurkovskis, A. Boyle, C Shields, D. Leahy (C.Dummigan 75); D. Kelly (H. Jeongwoo 63) , S. Stanton, P. McEleney, M Duffy (S. Nattestad 89); S. Murray (G. Sloggett 63) , P. Hoban (D. McMillan 75); Subs Not Used - P. Cherrie, O. Midstkogen, J. Odegi-Uzokwe, V. Adedokun.
Derry City: N. Gartside; R. Boyce, E. Toal, C. McJannet, D. Lafferty; W. Fitzgerald, J. Malone (D. Cole h-t), C. Harkin (P. Ferry 81), J. Thomson; J. Akintunde, D. Parkhouse (C. Coll h-t); Subs Not Used - J. Lemoignan, M. McChrystal, D. Lupano, C. McLaughlin, B. Barr, M. Harris.
Referee - Rob Harvey (Dublin).