* Machinery orders boost machinery, construction stocks
* Banks, utilities weak on Tepco burden concern
* Bridgestone jumps on strong FY 2011 forecast
* Support seen at the top of the Ichimoku cloud at 9,559.62
* Long-term support looms at 9,300-fund manager
By Ayai Tomisawa and Antoni Slodkowski
TOKYO, May 16 (Reuters) - Tokyo stocks fell for a third straight session on Monday, as volatile commodities and concerns about global growth sapped risk appetite, while banks lost more ground on worries about their loans to troubled nuclear operator Tokyo Electric Power .
Utilities also dropped further following news late last week that they will be asked to contribute to a fund to help Tokyo Electric (Tepco) compensate victims of the crisis at its tsunami-crippled nuclear plant.
But surprisingly strong machinery orders data lent some support to the market, boosting shares of construction companies and machinery makers on hopes that reconstruction demand after the March earthquake and tsunami will bolster capital spending.
Investors also remain somewhat hobbled while Japan's earnings season continues amid uncertainty about the outlook this year because supply disruptions have meant many manufacturers have not given their usual guidance, while analysts are still working out their verdicts on the ones that have.
"We have entered a 'risk-off' stage in Tokyo. Earnings season is slowly coming to an end so traders are again shifting their focus from micro factors like earnings to the broader macro picture," said Makoto Kikuchi, chief executive officer at Myojo Asset Management.
Potential risk factors for Tokyo stocks are volatile commodities markets, a possible correction ahead for U.S. stocks as the Federal Reserve ends its supportive policy, and the fear of a worsening euro-zone debt crisis, Kikuchi said.
"If overseas stocks slip again, the Nikkei may fall as low as 9,300," he added.
By midafternoon, the benchmark Nikkei average was down 0.6 percent at 9,589.17, while the broader Topix shed 0.9 percent to 832.33.
The Nikkei dropped to a session low of 9,599.33 but stemmed its decline at the top of the daily Ichimoku cloud, which is seen immediate support for the market.
Analysts said a break below that level may push the Nikkei to the bottom of the cloud at 9,533,88. If the index also falls below that level, that would be a major bearish signal for investors and could trigger even more selling, analysts said.
BANKS, UTILITIES EXTEND LOSSES
Banks fell further after the government's top spokesman sparked concern on Friday that banks are likely to be asked to ease troubled Tepco's loan burden.
On Sunday, Japanese officials denied the government will ask banks to forgive loans to Tepco to help it cope with massive compensation claims arising from the crisis at the plant but investors still seemed worried.[ID:nL4E7GF015]
"Investors' concerns are mainly due to uncertainly over how much banks will have to shoulder for Tepco," said Yumi Nishimura, a senior market analyst at Daiwa Securities.
"Until there are clear indications, investors may avoid investment in banks."
Mitsubishi UFJ Financial Group shed 1.0 percent to 379 yen, Mizuho Financial Group slipped 1.5 percent to 128 yen and Sumitomo Mitsui Financial Group weakened 1.4 percent to 2,416 yen. Mizuho and SMFG also said on Friday they expect their core lending activities to remain sluggish this year.[ID:nL3E7GD29Y]
Utility stocks extended losses into a third day after the government approved on Friday a plan to help Tepco compensate victims of the crisis at its tsunami-crippled nuclear plant and said other utilities would be asked to pay annual premiums to help fund compensation. Shares initially fell on Thursday in anticipation of the move.[ID:nL3E7GD00T]
Chubu Electric fell 4.4 percent to 1,419 yen, Tohoku Electric lost 4.6 percent to 1,068 yen and Kansai Electric dropped 4 percent to 1,509 yen.
But machinery makers outperformed, with industrial robot maker Fanuc Ltd rising 0.2 percent to 12,970 yen and Mitsubishi Heavy Industries gaining 1.1 percent to 381 yen.
Core machinery orders rose 2.9 percent in March from the previous month, data showed on Monday, compared with the median estimate for a 9.6 percent decline and following a revised 1.9 percent decline in the previous month. [ID:nL4E7GG002]
Optimism about a rise in reconstruction-related demand also boosted construction shares, with the construction subindex up 0.5 percent.
Nissei Build Kogyo Co , a builder of prefabricated houses, soared 6.4 percent to 182 yen after it forecast its parent-only operating profit would almost double to 1.1 billion yen in the current financial year on strong demand after the March 11 earthquake. [ID:nT130Y2EU1]
Bridgestone Corp gained 2.4 percent to 1,869 yen after the tyremaker on Friday hiked its operating profit forecast for the business year to December 2011 to 167 billion yen from 140 billion yen, citing cost-cutting and higher tyre prices overseas.[ID:nT1363U1F] (Editing by Chris Gallagher)