* Dow, S&P 500 ended at records on Monday
* Semiconductors rally; Skyworks lifts outlook
* Pilgrim's raises buyout offer for Hillshire
* Dow off 0.2 pct; S&P 500 down 0.1 pct; Nasdaq off 0.3 pct
(Updates to midday; adds automakers' shares and auto sales)
By Ryan Vlastelica
NEW YORK, June 3 U.S. stocks edged lower on
Tuesday, with the Dow and the S&P 500 receding from Monday's
record closing levels as traders found few reasons to buy
following a string of gains, though a rise in semiconductor
companies' shares limited losses.
The day's slight losses were broad, with eight of the 10
primary S&P 500 sector indexes down for the day, led by telecom
, which fell 0.6 percent. Slightly more than 60 percent
of stocks traded on both the New York Stock Exchange and the
Nasdaq fell on the day.
Monday marked the Dow's second straight record closing high,
while it was the third consecutive record close for the S&P 500.
However, recent advances were made on light volume, indicating
that the rally has lacked conviction.
"Valuations are elevated, and therefore anything that looks
soft gives the market pause," said Mark Luschini, chief
investment strategist at Janney Montgomery Scott in
Philadelphia. "Recent data has collectively suggested things are
decent, which is fertile for stocks, though more in the
long-term than right now."
The Dow Jones industrial average fell 25.75 points
or 0.15 percent, to 16,717.88. The S&P 500 slipped 2.57
points or 0.13 percent, to 1,922.40. The Nasdaq Composite
dropped 11.51 points or 0.27 percent, to 4,225.69.
Google Inc shares fell 1.8 percent to $554.44 and
weighed on the Nasdaq.
The CBOE Volatility Index rose for a second straight
day, up 3.2 percent, though it remains under 12, well below the
historical average of 20. While the current level of the VIX
indicates a lack of fear in the market, some investors are
concerned that it also reflects a sense of complacency.
Semiconductor stocks ranked among the market's leaders, with
the PHLX semiconductor index up 0.6 percent. The sector
rallied after Skyworks Solutions Inc raised its
earnings and revenue outlook, driving its stock up 5.4 percent
to $45.41. Broadcom Corp also gave a boost to
chipmakers, up 3 percent at $35.87.
Automakers attracted attention after both General Motors Co
and Ford Motor Co reported May sales that topped
expectations. GM shares rose 0.9 percent to $35.16. Ford's stock
shot up 0.7 percent to $16.55.
Hillshire Brands shares rose 9.1 percent to $58.45
after poultry producer Pilgrim's Pride Corp increased
its offer to buy Hillshire, known for its Jimmy Dean sausages,
and topped an offer from poultry rival Tyson Foods Inc.
Hillshire said it would conduct talks with both parties.
Pilgrim's stock fell 1.7 percent to $25.47. Tyson dropped
2.1 percent to $42.51.
Element Financial Corp agreed late Monday to buy
PHH Corp's auto fleet leasing business for about $1.4
billion in cash. Shares of PHH slid 7.1 percent to $23.46.
In the latest economic data, April factory orders rose 0.7
percent, topping the growth forecast of 0.5 percent for orders,
(Editing by Bernadette Baum, Nick Zieminski and Jan Paschal)