June 3, 2014 / 5:22 PM / 4 years ago

Dow, S&P 500 dip from record levels, but semis jump

NEW YORK (Reuters) - 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.

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, June 2, 2014. REUTERS/Lucas Jackson

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, excluding transportation.

Editing by Bernadette Baum, Nick Zieminski and Jan Paschal

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