US STOCKS-Wall St edges higher, boosted by healthcare; Alphabet, Amazon pressure Nasdaq

* Yields on 10-yr U.S. Treasury fall further
* Alphabet, Amazon slip on regulatory scrutiny
* U.S. manufacturing activity unexpectedly slows last month
* Amgen, Merck among boosts to healthcare sector
* Dow up 0.34%, S&P gains 0.28%, Nasdaq down 0.40%
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* Dow up 0.34%, S&P gains 0.28%, Nasdaq down 0.40%

(Adds quote, updates prices)
By Medha Singh and Amy Caren Daniel
June 3 (Reuters) - The S&P 500 and Dow Jones industrials
ticked higher on Monday, propped up by healthcare stocks, but
steep losses in shares of internet giants Alphabet and Amazon on
fears of regulatory risks limited advances and kept the
tech-heavy Nasdaq in the red.
Alphabet Inc GOOGL.O tumbled 6.4% after sources told
Reuters the U.S. Justice Department is preparing an
investigation of the Google-parent to determine whether the
company broke antitrust laws in operating its online businesses.
Amazon.com AMZN.O dropped 3.2% after a report that the
e-commerce giant could face heightened antitrust scrutiny under
a new agreement between U.S. regulators. "People are just worried that these companies could be
impacted by government regulations," said Robert Pavlik, chief
investment strategist and senior portfolio manager at SlateStone
Wealth LLC in New York.
"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."
Their declines weighed on the communication services
.SPLRCL and the consumer discretionary sectors .SPLRCD .
The latest ISM survey showed U.S. manufacturing growth
unexpectedly slowed in May to its weakest pace in more than
two-and-a-half years. This adds to weak factory activity surveys
from Asia and the eurozone earlier in the day. The ISM data along with trade uncertainty sent investors
fleeing for safety in bonds, which pushed yields on U.S.
two-year notes to their biggest two-day fall since 2008,
reflecting growing conviction that the Federal Reserve will
start cutting interest rates to stave off a recession. US/
Offering some respite, Mexican officials said the country
could reach an agreement with the U.S. to resolve a dispute over
migration that prompted President Donald Trump to threaten
duties last week, which resulted in Wall Street's main indexes
ending May 6% lower. At 10:56 a.m. ET the Dow Jones Industrial Average .DJI was
up 83.48 points, or 0.34%, at 24,898.52; the S&P 500 .SPX was
up 7.66 points, or 0.28%, at 2,759.72; and the Nasdaq Composite
.IXIC was down 29.91 points, or 0.40%, at 7,423.24.
Healthcare stocks .SPXHC , the worst performing sector this
year, rose 0.99%, helped by positive drug data from a handful of
companies including Amgen Inc AMGN.O and Merck & Co MRK.N .
Amgen jumped 5.4% after its drug showed a high response rate
in a small lung and colon cancer trial, while Merck rose 2.0%
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 3.6% after saying it would not make a
bid to combine with health insurer Centene Corp CNC.N , which
plunged 9.1%. Boeing Co BA.N , the single largest U.S. exporter to China,
fell 1.7% and was the biggest drag on the blue chip Dow index.
Advancing issues outnumbered decliners by a 2.69-to-1 ratio
on the NYSE and by a 1.57-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and 15 new
lows, while the Nasdaq posted 16 new highs and 92 new lows.