(Updates with afternoon trading, adds analyst comment)

* FedEx ( FDX ), UPS slump after Amazon ( AMZN ) opens up its logistics

network

* eBay ( EBAY ) rises after GameStop's ( GME ) buyout bid

* S&P 500 -0.33%, Nasdaq -0.12%, Dow -0.91%

By Noel Randewich and Niket Nishant

May 4 (Reuters) - Wall Street dipped from record highs

on Monday after a South Korean ship was hit by an explosion in

the Strait of Hormuz and Tehran demonstrated its grip on Middle

East oil, dampening optimism about strong first-quarter earnings

reports.

Energy stocks rose after the reports of the latest

confrontations. An explosion reported aboard a South Korean

merchant ship appeared likely to persuade commercial shippers it

was still unsafe after U.S. President Donald Trump said the U.S.

Navy would open the strait.

Tehran said it forced a U.S. warship to turn back after it

attempted to enter the strait, while the UAE reported a fire at

an oil installation following an Iranian drone attack.

Uncertainty related to the Middle East conflict weighed on

U.S. stocks after the S&P 500 hit a record high last Friday amid

a stronger-than-expected quarterly earnings season.

"With the market at all-time highs, there's not a lot of

room for error, and it feels like the kind of big asymmetric

risk is still to the downside, even if it's maybe not the most

probable outcome that we get back into a hot war," said Ross

Mayfield, an investment strategist at Baird Private Wealth

Management.

S&P 500 companies are expected to post aggregate earnings

growth of 28% year/year for the first quarter, double the

expectation of 14% at the start of April, according to LSEG

I/B/E/S. Wall Street's AI heavyweights account for much of that

optimism.

Berkshire Hathaway ( BRK/A ) reported on Saturday that it was a

net seller of stocks for the 14th consecutive quarter. Investors

closely watch the conglomerate, often viewed as a bellwether of

the U.S. economy, for its insight into valuations and broader

market conditions.

Shares of GameStop ( GME ) tumbled 8.5% and eBay ( EBAY ) rose

5.4% after the video game retailer unveiled a proposal to buy

the online marketplace for about $56 billion in a cash-and-stock

deal. GameStop's ( GME ) stock market value is about $11 billion.

The S&P 500 was down 0.33% at 7,206.53 points.

The Nasdaq declined 0.12% to 25,083.19 points, while the Dow

Jones Industrial Average was down 0.91% at 49,050.99 points.

Ten of the 11 S&P 500 sector indexes declined, led lower by

materials, down 1.37%, followed by a 0.89% loss in

industrials.

Delivery firms FedEx ( FDX ) and United Parcel Service ( UPS )

fell about 9% each after Amazon.com ( AMZN ) said it was rolling

out "Amazon Supply Chain Services," opening up its logistics

network for other businesses to use.

The declines in FedEx ( FDX ) and UPS dragged the Dow Jones

Transportation Average index 4.3% to its lowest level in

nearly a month.

Cruise operator Norwegian dropped about 8% after

slashing its annual forecast due to higher fuel costs related to

the Middle East conflict.

Declining stocks outnumbered rising ones within the S&P 500

by a 2.1-to-one ratio.

The S&P 500 posted 26 new highs and 22 new lows; the Nasdaq

recorded 115 new highs and 70 new lows.