* 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 (Frankfurt: HX6.F - news) , June 3 (Reuters) - U.S. stocks edged lower onTuesday, with the Dow and the S&P 500 receding from Monday'srecord closing levels as traders found few reasons to buyfollowing a string of gains, though a rise in semiconductorcompanies' shares limited losses.
The day's slight losses were broad, with eight of the 10primary S&P 500 sector indexes down for the day, led by telecom, which fell 0.6 percent. Slightly more than 60 percentof stocks traded on both the New York Stock Exchange and theNasdaq 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, indicatingthat the rally has lacked conviction.
"Valuations are elevated, and therefore anything that lookssoft gives the market pause," said Mark Luschini, chiefinvestment strategist at Janney Montgomery Scott inPhiladelphia. "Recent data has collectively suggested things aredecent, which is fertile for stocks, though more in thelong-term than right now."
The Dow Jones industrial average fell 25.75 pointsor 0.15 percent, to 16,717.88. The S&P 500 slipped 2.57points or 0.13 percent, to 1,922.40. The Nasdaq Composite dropped 11.51 points or 0.27 percent, to 4,225.69.
The CBOE Volatility Index rose for a second straightday, up 3.2 percent, though it remains under 12, well below thehistorical average of 20. While the current level of the VIXindicates a lack of fear in the market, some investors areconcerned that it also reflects a sense of complacency.
Semiconductor stocks ranked among the market's leaders, withthe PHLX (Shenzhen: 300287.SZ - news) semiconductor index up 0.6 percent. The sectorrallied after Skyworks Solutions Inc (NasdaqGS: SWKS - news) raised itsearnings and revenue outlook, driving its stock up 5.4 percentto $45.41. Broadcom Corp (NasdaqGS: BRCM - news) also gave a boost tochipmakers, up 3 percent at $35.87.
Automakers attracted attention after both General Motors Co and Ford Motor Co (NYSE: F - news) reported May sales that toppedexpectations. GM (NYSE: GM - news) shares rose 0.9 percent to $35.16. Ford's stockshot up 0.7 percent to $16.55.
Hillshire Brands (Frankfurt: LEE1.F - news) shares rose 9.1 percent to $58.45after poultry producer Pilgrim's Pride Corp increasedits offer to buy Hillshire, known for its Jimmy Dean sausages,and topped an offer from poultry rival Tyson Foods Inc (NYSE: TSN - news) .Hillshire said it would conduct talks with both parties.
Element Financial Corp (Toronto: EFN.TO - news) agreed late Monday to buyPHH Corp's auto fleet leasing business for about $1.4billion in cash. Shares of PHH (Frankfurt: PQZ.F - news) slid 7.1 percent to $23.46.
In the latest economic data, April factory orders rose 0.7percent, topping the growth forecast of 0.5 percent for orders,excluding transportation. (Editing by Bernadette Baum, Nick Zieminski and Jan Paschal)
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