* Energy shares drag as oil spill remains unchecked
* Feds launch criminal probe of spill, adding to losses
* Manufacturing expands for 10th month in a row in May
* Dow off 1.1 pct, S&P off 1.7 pct, Nasdaq off 1.5 pct
* For up-to-the-minute market news see []
(Updates to close)
By Leah Schnurr
NEW YORK, June 1 (Reuters) - U.S. stocks fell on Tuesday as
energy shares slid after the latest failed attempt to halt the
oil spill in the Gulf of Mexico and the U.S. government
announced a criminal probe into the disaster.
Investors punished shares of companies directly involved
with the spill and losses accelerated into the close following
the news of the investigation. For details, see []
[]
"It's the fact that no one can really quantify the cost of
the BP disaster out there," said Gary Bradshaw, portfolio
manager at Hodges Capital Management in Dallas.
"There's so much uncertainty, investors are stepping to the
sidelines."
U.S.-listed shares of BP Plc <BP.L><BP.N>, which owns the
well, tumbled 15 percent. The losses signaled growing
frustration over the difficulty of sealing off the worst oil
spill in U.S. history.
The Dow Jones industrial average <> dropped 112.61
points, or 1.11 percent, to 10,024.02. The Standard & Poor's
500 Index <.SPX> fell 18.70 points, or 1.72 percent, to
1,070.71. The Nasdaq Composite Index <> gave up 34.71
points, or 1.54 percent, at 2,222.33.
Decliners carried the day on the New York Stock Exchange,
outpacing advancers by almost 4 to 1.
BP's American Depositary Receipts have now lost $75.03
billion since the April 20 rig explosion, and the stock has the
lowest price-to-earnings ratio of any of the major oil
companies as a result of the fall.
Halliburton Co, which performed some work on the well, lost
14.8 percent after Goldman Sachs removed the company from its
"conviction buy list." []
Transocean <RIG.N>, which owns the rig, slid 11.9 percent
to $50.04, while the S&P energy index <.GSPE> shed 4.3
percent.
Markets were choppy throughout the day and had earlier
found support from data that showed manufacturing expanded for
a tenth straight month in May.
In addition to the stronger-than-expected manufacturing
data, construction spending recorded its largest gain in nearly
10 years in April, government data showed. []
Despite the positive U.S. data, investors worry about what
impact the euro zone's debt crisis will have on global economic
growth. Indeed, data showed a more sluggish pace in euro zone
manufacturing, while the rate of China's factory output eased.
[]
On the upside, Apple Inc <AAPL.O> rose 1.5 percent to
$260.83 as a successful international launch of its iPad
prompted analysts to raise earnings and sales estimates.
[]
In merger news, ev3 Inc <EVVV.O> jumped 17.4 percent to
$22.22 after Covidien Plc <COV.N> agreed to buy the maker of
stents and other vascular devices for $2.6 billion. Covidien
shares slipped 2.7 percent to $41.24. []
Regarding the investigation of the oil spill, federal
agencies, including the FBI, will participate.
"If we find evidence of illegal behavior, we will be
forceful in our response," U.S. Attorney General Eric Holder
said in New Orleans.
(Editing by Kenneth Barry)
