* Irish turmoil, insider trading probe hit bank stocks
* SanDisk, semis cap losses on Nasdaq
* Dow off 1.2 pct, S&P off 1.1 pct, Nasdaq off 0.5 pct (Updates to midday)
By Leah Schnurr
NEW YORK, Nov 22 (Reuters) - U.S. stocks fell on Monday as political turmoil clouded Ireland's bailout deal and investors fretted over the outcome of a broad insider trading probe.
Financial shares ranked among the hardest hit. Federal authorities may file a series of insider trading cases against hedge fund traders, consultants and Wall Street bankers within weeks, sources said.
A report that the FBI had raided two hedge funds in connection with the probe saw stocks extend declines in the early afternoon. Goldman Sachs Group tumbled 4.4 percent to $159.38, while the KBW bank index lost 2 percent.
Nick Kalivas, senior equity index analyst at MF Global in Chicago, said an isolated case would normally be absorbed quickly by the market, but there were worries this case could be more far reaching.
"Financials have been weak all day, and I think that's playing a pretty pivotal role," Kalivas said.
Adding to the weakness, Ireland's government began to unravel on the heels of a bailout plan to resolve its banking and budget crisis.
U.S.-listed shares of Bank of Ireland tumbled 18 percent to $2.19, and Allied Irish Banks Plc lost 8.1 percent to $1.13.
The Dow Jones industrial average dropped 128.66 points, or 1.15 percent, to 11,074.89. The Standard & Poor's 500 Index shed 12.90 points, or 1.08 percent, to 1,186.83. The Nasdaq Composite Index declined 13.00 points, or 0.52 percent, to 2,505.12.
The euro extended its slide to $1.3608, while U.S. oil futures dropped 1.2 percent to $81.01 a barrel. Exxon Mobil and Chevron Corp were the heaviest weights on the Dow, with Exxon Mobil down 2.2 percent at $68.97 and Chevron down 2 percent at $82.28.
The Nasdaq fared better than the other two indexes with strength in the semiconductor sector after Robert W. Baird upgraded SanDisk Corp shares to "outperform" from "neutral."
SanDisk gained 4.8 percent to $41.90, while the PHLX Semiconductor Index added 0.1 percent.
Software provider Novell Inc jumped after it agreed to be bought by privately held Attachmate Corp for about $2.2 billion. Novell gained 6.5 percent to $5.96.
Netflix Inc spiked 7.8 percent to $186.61 after it said it will offer an unlimited streaming-only subscription plan in the United States. (Reporting by Leah Schnurr: Editing by Jan Paschal)