* Indexes: Dow up 0.3%, S&P 500 down 0.1%, Nasdaq down 0.6%

* Memory-chip makers lead losses

* UnitedHealth ( UNH ) rises after 2026 profit forecast raise

* GE Aerospace falls despite lifting 2026 forecast

* US retail sales rise marginally in June

(Updates throughout)

By Ragini Mathur and Avinash P

July 16 (Reuters) - The S&P 500 and the Nasdaq slipped on

Thursday as renewed weakness in chip stocksovershadowed an

upbeat start to second-quarter earnings, while investors parsed

fresh economic data for clues on the health of the economy.

Semiconductor stocks extended losses from the previous

session, with the Philadelphia SE Semiconductor index

down 3.5%. U.S.-listed shares of TSMC fell 2.1%, even

after the advanced AI chipmaker reported stellar results.

Memory-chip makers were among the biggest laggards. Sandisk ( SNDK )

fell about 10%, while Western Digital ( WDC ) and

Seagate Technology ( STX ) were down 8% and 7.5%, respectively.

Chip stocks were earlier among the biggest beneficiaries of

this year's rally, as optimism around AI spending by

hyperscalers helped drive Wall Street to record highs.

Shiraz Ahmed, founder and CEO at Sartorial Wealth Inc, said

the chip rally is cooling off, but not because AI is losing

steam, but because AI adoption still isn't fully widespread yet.

As a result, heavy capex spending continues across the AI

ecosystem, from energy to semiconductors.

The S&P 500 has risen more than 10% this year and

remains close to its June record closing high, leaving the rally

vulnerable to any disappointment.

The tech-led selloff pulled the benchmark lower, even as

every other sector except technology traded higher.

Healthcare shares helped cushion the broader

market, with gains of 2.2%.

UnitedHealth ( UNH ) raised its 2026 profit forecast,

sending shares of the healthcare giant up 4.3% and keeping the

Dow afloat.

Abbott jumped 12% after beating quarterly estimates

and lifting its annual profit outlook.

Defensive groups, including consumer staples and

real estate, also helped limit losses, rising about 2%

each.

At 11:51 a.m. ET, the Dow Jones Industrial Average

rose 133.94 points, or 0.25%, to 52,792.58, the S&P 500

lost 5.77 points, or 0.08%, to 7,566.63 and the Nasdaq Composite

lost 156.53 points, or 0.60%, to 26,111.19.

DATA SUPPORTS GROWTH OUTLOOK

Investors parsed June retail sales data that showed only a

marginal rise as lower gasoline prices weighed on receipts at

service stations. Still, bargain-hunting consumers continued to

support underlying spending.

Separately, the number of Americans filing claims for

unemployment benefits fell last week, pointing to continued

labor market stability.

"The upshot is that consumption appears to be gaining some

momentum, which, at the margin at least, provides some support

to our forecast that the Fed will raise interest rates later

this year," said Stephen Brown, chief North America economist at

Capital Economics.

Benign inflation reports for June earlier this week reduced

worries over any imminent rate hike by the Federal Reserve.

Markets are pricing in an 88% chance the Fed will hold rates

steady at this month's meeting and about a 50% chance of a

quarter-point hike in September, according to CME's FedWatch

tool.

Geopolitical risks also loomed large as Iran has asked

Yemen's Houthi movement to prepare to close the Red Sea oil

route if the U.S. strikes Iranian power infrastructure, sources

told Reuters.

United Airlines fell 1.4% as a renewed surge in oil

prices weighed on its third-quarter and full-year profit

outlooks.

GE Aerospace dipped 4.7%, despite the jet-engine

maker lifting its 2026 profit forecast.

Advancing issues outnumbered decliners by a 1.12-to-1 ratio

on the NYSE, while declining issues outnumbered advancers by a

1.38-to-1 ratio on the Nasdaq.

(Reporting by Ragini Mathur and Avinash P in Bengaluru; Editing

by Maju Samuel and Devika Syamnath)