US STOCKS-Wall Street falls as Facebook, Alphabet, Amazon drag

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* Facebook, Amazon, Alphabet tumble on fears of regulatory
risks
* U.S. manufacturing activity unexpectedly slows last month
* Healthcare boosted by Amgen, Gilead, Merck
* Indexes down: Dow 0.24%, S&P 500 0.49%, Nasdaq 1.64%

(Updates to late afternoon; adds commentary, NEW YORK dateline,
changes byline)
By Sinéad Carew
New York June 3 (Reuters) - The three major U.S. stock
indexes declined on Monday on weaker-than-expected economic
data, while shares of Alphabet, Facebook and Amazon.com fell
sharply on fears the companies are the targets of U.S.
government antitrust regulators, putting pressure on the
tech-laden Nasdaq.
The S&P 500's communications, technology and consumer
discretionary sectors were the biggest losers, but the materials
index showed strong gains with the biggest boost from Dupont
DD.N .
The benchmark S&P 500 .SPX swung in and out of negative
territory as investors also eyed the latest comments around the
U.S. trade battles with both China and Mexico as well as U.S.
President Donald Trump's decision Friday to end preferential
trade treatment for India. "We're surprised the market didn't take a sourer tone today
not only with China digging in, the Mexico headlines and the
U.S. revoking India's status as a developing country," said John
Augustine, chief investment officer at Huntington National Bank
in Columbus, Ohio, also citing weak manufacturing data.
"Investors must be thinking in some form that this is as bad
as the headlines and economic reports are going to get this
week," Augustine said.
An ISM survey showed U.S. manufacturing growth unexpectedly
slowed in May, driving demand for the safety of government
bonds. Two-year yields US2YT=RR hit their lowest since
September 2017 on growing conviction that the Federal Reserve
will start cutting interest rates to stave off a
recession. The data represents the latest fallout from the Sino-U.S.
trade war, which flared up dramatically last month, and Trump's
threat last week to impose tariffs on all Mexico imports.
At 2:55PM ET, the Dow Jones Industrial Average .DJI fell
60.24 points, or 0.24%, to 24,754.8, the S&P 500 .SPX lost
13.42 points, or 0.49%, to 2,738.64 and the Nasdaq Composite
.IXIC dropped 122.51 points, or 1.64%, to 7,330.64.
The Nasdaq would confirm a correction if it closes at
7347.5964 or lower, which would put it 10% below its May 3
closing record.
High profile internet stocks dominated trading on the day
with Facebook Inc FB.O falling as much as 9.3% after the Wall
Street Journal reported that the Federal Trade Commission has
secured the right to examine how the social media company
practices affect digital competition. The stock was on pace for
its biggest one-day drop since July 26. Alphabet Inc GOOGL.O tumbled as much as 7.1% after sources
told Reuters the U.S. Justice Department is preparing an
investigation to determine if the Google-parent broke antitrust
laws. Amazon.com AMZN.O slipped as much as 5.4% on a report
that the e-commerce giant could be put under the watch of the
FTC. The communication services sector .SPLRCL was down 2.6%,
the biggest drop of the S&P's 11 major sectors with pressure
from Facebook and Google while Amazon shares helped pull the
consumer discretionary sector .SPLRCD down 0.9%.
The S&P materials sector .SPLRCM was the biggest
percentage gainer of the S&P's major sectors, with a 2.5% gain.
Dupont's 11.5% gain accounted for roughly half of the sector's
rise in the first trading session after it spun off its
agriculture business Corteva Inc CTVA.K .
Healthcare was one bright spot for the Nasdaq with the
Nasdaq biotech index .NBI climbing 1.8%, helped by shares of
companies including Amgen Inc AMGN.O and Gilead GILD.O .
Amgen and Merck & Co MRK.N reported positive drug data at the
annual American Society of Clinical Oncology meeting in Chicago.
Amgen jumped 4% after its drug showed a high response rate
in a small lung and colon cancer trial, while Merck rose 1.3%
after data showed nearly a quarter of patients who received
immunotherapy Keytruda as an initial treatment for advanced lung
cancer were still alive after five years. Humana HUM.N gained 2.3% after saying it would not make a
bid to combine with health insurer Centene Corp CNC.N , which
plunged 8%. Boeing Co BA.N , the single largest U.S. exporter to China,
fell 1.5% and was the biggest drag on the blue chip Dow index.
The S&P 500 posted 14 new 52-week highs and 21 new lows; the
Nasdaq Composite recorded 21 new highs and 147 new lows.