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Solar stocks drop as US Senate proposes to phase out tax

credits

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Eli Lilly ( LLY ) to acquire Verve Therapeutics ( VERV ) for up to $1.3 bln

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Retail sales post biggest drop in four months in May

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Indexes: Dow down 0.7%, S&P 500 down 0.8%, Nasdaq down

0.9%

(Updates close with volume, share moves)

By Caroline Valetkevitch

NEW YORK, June 17 (Reuters) - U.S. stocks finished with

losses on Tuesday as the Israel-Iran conflict raged on for a

fifth day and kept investor anxiety high, with the U.S. military

moving fighter jets to the Middle East.

Indexes added to losses in afternoon trading, and the Cboe

Volatility index rose to end at 21.6, its highest close

since May 23.

Reuters reported, citing three U.S. officials, that the U.S.

military is deploying more fighter aircraft to the Middle East

and extending the deployment of other warplanes.

President Donald Trump called for Iran's "unconditional

surrender." The war began on Friday when Israel attacked Iran's

nuclear facilities.

"We're in a period where visibility is not great,

uncertainty is high, and the wall of worry is under

construction," said Terry Sandven, chief equity strategist at

U.S. Bank Wealth Management in Minneapolis, Minnesota.

Besides the Middle East conflict, investors are closely

watching for any new information on Trump's tariffs, his tax-cut

bill and U.S. interest rates.

A Federal Reserve monetary policy decision is expected on

Wednesday, with policymakers widely seen leaving rates

unchanged.

All of the major S&P 500 sectors were lower except for energy

, which gained along with sharply higher oil prices.

Investors have worried that the conflict could create

bottlenecks for oil exports from the oil-rich Middle East.

Defense shares also rose, including Lockheed Martin ( LMT ),

which was up 2.6%.

The Dow Jones Industrial Average fell 299.29 points,

or 0.70%, to 42,215.80, the S&P 500 lost 50.39 points, or

0.84%, to 5,982.72 and the Nasdaq Composite lost 180.12

points, or 0.91%, to 19,521.09.

Sandven said the market could trade sideways until investors

get more clarity, but earnings and other factors are likely to

remain favorable for equities.

Solar stocks fell after U.S. Senate Republicans late on

Monday unveiled proposed changes to Trump's tax-cut bill,

including a phase-out of solar, wind and energy tax credits by

2028.

Shares of Enphase Energy ( ENPH ) fell 24% and Sunrun ( RUN )

dropped 40%.

Eli Lilly ( LLY ) shares eased 2% after the company agreed

to acquire Verve Therapeutics ( VERV ) for up to $1.3 billion.

Shares of Verve surged.

Earlier Tuesday, data showed U.S. retail sales dropped more

than expected in May, while factory production barely rose last

month.

"The resilient consumer is getting skittish," said Brian

Jacobsen, chief economist at Annex Wealth Management.

Declining issues outnumbered advancers by a 2.07-to-1 ratio

on the NYSE. There were 97 new highs and 77 new lows on the

NYSE.

On the Nasdaq, 1,325 stocks rose and 3,130 fell as declining

issues outnumbered advancers by a 2.36-to-1 ratio.

Volume on U.S. exchanges was 15.71 billion shares, compared

with the 17.98 billion average for the full session over the

last 20 trading days.

(Additional Reporting by Chuck Mikolajczak and Kanchana

Chakravarty and Sukriti Gupta in Bengaluru; Editing by Maju

Samuel)