MIPS gas .equ question

[Jeff Baker]

When I assemble the following code for MIPS I get the subsequent error 
message from gas (vintage 2.12.1).

----------------------------------
.data
actives: .word 0
ker_stack: .word 0

.equ distance,(ker_stack-actives)

testloc: .word distance

.text
li $4,distance
----------------------------------

main.s: Assembler messages:
main.s:10: Error: absolute expression required `li'
cc: C:/QNX630/host/win32/x86/usr/bin/ntomips-as caught signal 1

Is this an assembler bug or a valid error?