(Updates to late morning)
By Denise Duclaux
NEW YORK, March 19 (Reuters) - Stocks slipped on Wednesday, retreating after five straight sessions of gains in the blue-chip Dow, as slack software sales from Oracle Corp. and the final countdown to war rattled Wall Street.
"People are taking a wait-and-see attitude," said Dan McMahon, head of listed trading at CIBC World Markets. "The deck is stacked in the (U.S.) allies' favor, but you still never know exactly what you are getting into until you get there. People are waiting to see how it all unfolds."
War appears imminent after U.S. President George W. Bush said his forces will invade if Iraqi President Saddam Hussein does not flee by 8 p.m. Wednesday evening, Washington time, which is 4 a.m. Thursday in Iraq (0100 GMT). Saddam has vowed to stay and fight, and tens of thousands of U.S. and British troops are in the desert in northern Kuwait preparing to attack.
Oracle, the world's No. 2 software maker, sank 9 percent, raising worries about the corporate outlook with war around the corner and the U.S. economic rebound looking sluggish. Oracle's key software sales fell short of expectations, and the company offered a murky outlook.
The broad Standard and Poor's 500 index fell 5 points, or 0.60 percent, to 861. The tech-laced Nasdaq Composite Index lost 21 points, or 1.56 percent, to 1,378. The blue-chip Dow Jones industrial average dropped 46 points, or 0.56 percent, to 8,147.
Market watchers warn that the session may be volatile as investors try to determine how the mounting crisis will end. The Dow has surged more than 8 percent in the last week on hopes for a short war, but worries remain about risks such as Iraq setting oil wells afire, attacks on the United States or a U.S. invasion getting bogged down.
Oracle skidded $1.13 to $11.12 and dragged on the business software sector. Oracle said quarterly revenues may range from down 6 percent to up 2 percent due to the war threat and rising energy prices.
The Goldman Sachs software index lost 3.99 percent. PeopleSoft Inc. sank $1.56, or more than 8 percent, to $16.69. Siebel Systems Inc. fell 79 cents, or 8 percent, to $8.53. BEA Systems Inc. dropped $1.04, or nearly 9 percent, to $10.88.
Tobacco shares bounced back after a beating on Tuesday amid renewed talk of the U.S. Justice Department's case against the industry, in which it said the United States is entitled to $289 billion in forfeited profits from cigarette makers.
Morgan Stanley raised its investment rating for the tobacco industry to attractive from in-line, saying "capital markets are now pricing into the sector a 'worst-worst' case with respect to litigation and fundamentals."
Altria Group Inc. , parent of Philip Morris USA, rose 94 cents, or almost 3 percent, to $33.54. R.J. Reynolds Tobacco Holdings Inc. rose $1.11, or 3 percent, to $34.68.
Corning Inc. , the No. 1 maker of fiber-optic cable, jumped 18 cents, or 3 percent, to $6.18. The company reiterated that it expects sales at its liquid crystal display glass business to grow 20 percent to 40 percent annually through 2006.
Semiconductor manufacturer Microchip Technology Inc. tumbled $2.88, or 12 percent, to $20.92. The company cut its fourth-quarter revenue and earnings guidance, saying sales have slowed because of U.S. preparations for a war with Iraq and tensions with North Korea.
The Philadelphia Stock Exchange semiconductor index slumped 3.06 percent. Intel Corp. , the world's largest semiconductor maker, lost 53 cents, or almost 3 percent, to $17.73. (With additional reporting by Doris Frankel)