(Recasts with preliminary close of trading, adds analyst

comment)

* Netflix ( NFLX ) falls as earnings forecast disappoints Wall Street

* Intuitive Surgical ( ISRG ) slides on insurance coverage concerns

* Flaring Middle East tensions send energy stocks higher

By Stephen Culp and Ragini Mathur

NEW YORK, July 17 (Reuters) - Wall Street extended its

decline on Friday as a pullback on stocks associated with the AI

boom, which has driven many of the gains so far this year,

morphed into a larger risk-off sentiment.

Semiconductor shares, which have led the broader market's

move in recent sessions, initially led the selloff, which

broadened as the session progressed.

All three major U.S. stock indexes closed lower on the day

and posted weekly losses.

The Philadelphia SE Semiconductor Index logged its

steepest weekly loss in over a year, and has tumbled nearly 18%

so far in July. Even so, the index remains up about 65%

year-to-date, compared with the S&P 500's nearly 9% gain over

the same time frame.

Some investors in the artificial intelligence space have begun

positioning for a slowdown in the nearly trillion-dollar

spending boom, with some active managers already scaling back

their exposure, according to a Reuters analysis.

"It's like the market has chip fatigue," said Ryan Detrick,

chief market strategist at Carson Group in Omaha, Nebraska.

"Chip stocks are down three of the last four weeks, and it's the

same worries, the same concerns; those stocks got way ahead of

themselves, and now they're coming back to Earth."

According to preliminary data, the S&P 500 lost 75.99

points, or 1.01%, to end at 7,457.78 points, while the Nasdaq

Composite lost 370.83 points, or 1.40%, to 25,511.12.

The Dow Jones Industrial Average fell 394.01 points, or

0.75%, to 52,158.96.

Among the major sectors of the S&P 500, energy stocks

were the biggest gainers, benefiting from spiking crude prices

amid signs of escalating hostilities in the Iran war.

Q2 EARNINGS SEASON GETS OFF TO AN UPBEAT START

Second-quarter earnings season is still in its early days,

with 49 of the companies in the S&P 500 having reported. Of

those, 90% have delivered better-than-expected results,

according to LSEG.

Analysts now see year-on-year S&P 500 earnings growth of

26.0%, in aggregate, up from the 19.2% expectations as of April

1, per LSEG.

"It's early in earnings season, but we're off to a

tremendous start," Detrick added. "Over the next several weeks,

we're going to get a lot more sectors and industries reporting.

But so far, the banks have really started us off on the right

foot."

Netflix ( NFLX ) tumbled after the company's

weaker-than-expected earnings forecast, raising doubts about the

sustainability of the content growth momentum.

Uber Technologies ( UBER ) dropped after the rideshare app

announced it would acquire Germany's Delivery Hero in

a deal worth nearly $15 billion.

Intuitive Surgical ( ISRG ) shares slid after the medical device

maker kept its da Vinci procedure growth forecast unchanged and

warned insurance-plan changes may be delaying patient care.

On the economic front, consumer sentiment increased to a

five-month high in July, but single-family housing starts and

building permits dipped, and industrial output increased by a

meager 0.1%.