US STOCKS-Wall Street pulls back modestly from record close

Reuters - UK Focus

* Dow, S&P 500 ended at records on Monday

* Semiconductors rally, Skyworks lifts outlook

* Pilgrim's raises buyout offer for Hillshire

* Indexes down: Dow 0.2 pct, S&P 0.1 pct, Nasdaq flat (Updates to open)

By Ryan Vlastelica

NEW YORK (Frankfurt: HX6.F - news) , June 3 (Reuters) - U.S. stocks edged lower inearly trading on Tuesday, receding from record levels as tradersfound few reasons to buy following a string of gains.

The day's losses were broad but largely slight. Nine of theten primary S&P 500 sectors were down on the day, led by telecom, which lost 0.7 percent. Slightly more than 60 percentof stocks traded on both the New York Stock Exchange and theNasdaq fell on the day.

The Dow and S&P 500 had closed at records on Monday; thatwas the benchmark S&P's third consecutive record. However,recent advances have come in light trading, indicating the rallyhas 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 29.92 points or0.18 percent, to 16,713.71, the S&P 500 lost 2.37 pointsor 0.12 percent, to 1,922.6 and the Nasdaq Composite dropped 1.81 points or 0.04 percent, to 4,235.39.

The CBOE Volatility Index rose for a second straightday, up 2.9 percent, though it remains under 12, well belowhistorical levels. While the current level of the VIX indicatesa lack of fear in the market, some investors are concerned italso reflects a sense of complacency among investors.

Semiconductor stocks were among the market's leaders, withthe PHLX (Shenzhen: 300287.SZ - news) semiconductor index up 0.5 percent. The groupwas lifted after Skyworks Solutions Inc (NasdaqGS: SWKS - news) raised itsearnings and revenue outlook, sending shares up 5 percent to$45.23. Broadcom Corp (NasdaqGS: BRCM - news) also gave a boost to chipmakers,up 2 percent to $35.52.

AT&T Inc (NYSE: T - news) raised its full-year revenue outlook to 5percent growth from 4 percent, but shares of the Dow componentwere essentially flat at $35.42.

Hillshire Brands (Frankfurt: LEE1.F - news) rose 9 percent to $58.37 afterPilgrim's Pride Corp increased its offer to buy thecompany and topped an offer from Tyson Foods Inc (NYSE: TSN - news) .Hillshire said it would conduct talks with both parties.

Shares of Pilgrim's fell 0.5 percent to $25.80 while Tyson (Taiwan OTC: 4134.TWO - news)was down 0.8 percent.

Element Financial Corp (Toronto: EFN.TO - news) late Monday agreed to buyPHH Corp's auto fleet leasing business for about $1.4billion in cash. Shares of PHH (Frankfurt: PQZ.F - news) fell 6.6 percent to $23.58.

In the latest economic data, April factory orders rose 0.7percent, over the expectation for growth of 0.5 percent. (Editing by Bernadette Baum and Nick Zieminski)

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