US STOCKS-Wall Street tumbles as Facebook, Alphabet extend slide

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* Facebook, Amazon, Alphabet tumble on fears of regulatory
risks
* U.S. manufacturing activity unexpectedly slows last month
* U.S. Treasury yields hit session lows after data
* Healthcare sector boosted by Amgen, Merck
* Indexes down: Dow 0.12%, S&P 0.37%, Nasdaq 1.29%

(Updates to early afternoon)
By Medha Singh and Shreyashi Sanyal
June 3 (Reuters) - U.S. stocks went back into the red on
Monday after regulatory fears sent shares of internet giants
Alphabet, Facebook and Amazon.com sharply lower, particularly
weighing down on the tech-laden Nasdaq.
Facebook Inc FB.O tumbled 7.4% after the Wall Street
Journal reported that the Federal Trade Commission (FTC) 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 6.7% 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 4.3% on a report that the
e-commerce giant could be put under the watch of the FTC.
"The concerns that the government is going to get involved
and possibly break these companies up or impose fines on their
operations is a major concern here," said Robert Pavlik, chief
investment strategist and senior portfolio manager at SlateStone
Wealth LLC in New York.
Facebook and Alphabet dragged the communication services
sector .SPLRCL down 3.09%, while Amazon shares pulled the
consumer discretionary sector .SPLRCD down 1.3%.
The ISM survey showed U.S. manufacturing growth unexpectedly
slowed in May, accelerating demand for 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 is the latest Sino-U.S. trade war fallout which
flared up dramatically last month and ended with U.S. President
Donald Trump threatening tariffs on all Mexico imports. Wall
Street's main indexes ended May at least 6% lower and the S&P is
now 7.7% away from its all-time high hit on May 1.
"The sentiment is waning, it's one of cautiousness," said
Peter Cardillo, chief market economist at Spartan Capital
Securities in New York. "It sure appears to be a continuation of
the May sell-off but will it be as ugly as May, is the
question."
At 12:55 p.m. ET the Dow Jones Industrial Average .DJI was
down 29.17 points, or 0.12%, at 24,785.87, the S&P 500 .SPX
was down 10.29 points, or 0.37%, at 2,741.77 and the Nasdaq
Composite .IXIC was down 96.12 points, or 1.29%, at 7,357.03.
Healthcare stocks .SPXHC rose 0.40%, while the Nasdaq
biotech index .NBI advanced 1.29%, helped by shares of
companies including Amgen Inc AMGN.O and Merck & Co MRK.N
that reported positive drug data at the ongoing annual American
Society of Clinical Oncology meeting in Chicago.
Amgen jumped 4.0% 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 1.4% after saying it would not make a
bid to combine with health insurer Centene Corp CNC.N , which
plunged 10.7%. Boeing Co BA.N , the single largest U.S. exporter to China,
fell 1.4% and was the biggest drag on the blue chip Dow index.
Advancing issues outnumbered decliners by a 1.51-to-1 ratio
on the NYSE. Declining issues outnumbered advancers for a
1.12-to-1 ratio on the Nasdaq.
The S&P index recorded 12 new 52-week highs and 21 new lows,
while the Nasdaq recorded 18 new highs and 135 new lows.