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Adobe up after lifting full-year revenue forecast

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Arm shares gain as stock to join Nasdaq 100 index

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US consumer sentiment ebbs in June; inflation worries

linger

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For the week: Dow set to fall, S&P and Nasdaq to rise

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Indexes down: Dow 0.33%, S&P 0.30%, Nasdaq 0.17%

(Updated at 12:03 p.m. ET/1603 GMT)

By Lisa Pauline Mattackal and Johann M Cherian

June 14 (Reuters) -

U.S. stock indexes fell on Friday, with the Nasdaq and the

S&P 500 slipping from record highs as investors booked profits

and weighed hawkish Federal Reserve projections against slowing

economic data.

Limiting losses on the tech-heavy Nasdaq, Adobe

jumped

14.5

% and was on track to mark its biggest one-day jump in four

years after the company

raised its annual revenue forecast

on more demand for its AI-powered software.

The Nasdaq and S&P 500 were set for their

first session in the red this week, after both notching four

consecutive record closing highs.

"What we're seeing is some mild profit taking, we've had

a good run up and set record highs almost every day this week,"

said Peter Cardillo, chief market economist at Spartan Capital

Securities.

The week's strong performance came as markets persisted

with expectations of a September start to policy easing - seeing

an over 70% chance of a cut at that meeting, as per the CME's

FedWatch tool - while traders are pricing in two cuts by

year-end.

However, that clashed with the central bank's own

forecasts released on Wednesday, where policymakers dialed back

their projections for three cuts this year to just one.

Cleveland Fed President Loretta Mester said the trend of

inflation moving lower is good news for the economy and the

central bank.

Hopes of easing Fed policy, combined with megacaps'

strength, have seen major indexes rally with the S&P 500 and the

Nasdaq on pace for their seventh week of gains out of eight.

"The market is also just pricing in a probability, even if

it's a small one, of a second half recession where the Fed has

to cut rates a lot," said Ross Mayfield, investment strategy

analyst at Baird.

The blue-chip Dow was on track to end the week lower.

A preliminary reading of the University of Michigan's

Consumer Sentiment Index

slipped to 65.6 in June, sharply lower than expectations.

Nine of the 11 S&P 500 sectors fell, led by a

1.6

% slide in industrials, and the economically

sensitive small-cap Russell 2000 index lost

1.8

%.

At 12:03 p.m. ET, the Dow Jones Industrial Average

was down 126.96 points, or 0.33%, at 38,520.14, the S&P

500 was down 16.29 points, or 0.30%, at 5,417.45, and the

Nasdaq Composite was down 30.57 points, or 0.17%, at

17,636.99.

Among others, Broadcom ( AVGO ) extended Thursday's gains

with a 1.7% rise after an upbeat forecast and announcing a

10-for-one stock split.

Sirius XM slipped 0.8% after the Nasdaq said the

stock would be removed from the Nasdaq 100 index, and replaced

with Arm Holdings. Shares of Arm rose 2.2%.

Comments from Chicago Fed President Austan Goolsbee and

Fed Governor Lisa Cook are also expected on Friday.

A BofA Global Research report showed U.S. value stock funds

saw $2.6 billion of outflows, while investors poured $1.8

billion into U.S. growth stock funds in the week to Wednesday.

Declining issues outnumbered advancers for a 3.34-to-1

ratio on the NYSE and for a 2.77-to-1 ratio on the Nasdaq.

The S&P index recorded eight new 52-week highs and 16

new lows, while the Nasdaq recorded 19 new highs and 149 new

lows.