By Donna Kardos Yesalavich Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--BP PLC's (BP, BP.LN) U.S. shares slipped slightly Thursday as BP Chief Executive Tony Hayward faced a grilling by U.S. lawmakers on the oil spill and investors voiced concern over the lack of a monetary cap to BP's ultimate liabilities. The decline, with BP's American depositary shares down 0.7% to $31.64 recently, erases part of BP's Wednesday gains, which had come after the oil giant agreed to cut its dividend and set aside $20 billion to help pay for claims resulting from the Gulf of Mexico oil disaster. The stock is now down 6.8% for the week, and its decline since the April 20 explosion of the Deepwater Horizon rig now amounts to about 48%. However, BP's shares in London climbed 6.7% Thursday, as it represented the first day the U.K. could react to BP's Wednesday afternoon agreement with the White House. The cost to insure BP's debt fell. BP options were among the most actively traded Thursday, although they were less prominent than in recent sessions and the number of put options, which convey the right to sell, was not much higher than the number of call options, which convey the right to buy. The mixed activity came as U.S. lawmakers blasted BP's chief executive at his first appearance before Congress since the deadly oil-rig explosion, with a top Democrat saying he "found no evidence that you paid any attention to the tremendous risks BP was taking." The remarks suggested BP's agreement to contribute $20 billion to a spill-damage fund did little to quell anger among Democrats on Capitol Hill. Meanwhile, there are increasing concerns from analysts and investors about whether the $20 billion the company agreed to put into escrow will be enough. Credit Agricole analysts told clients in a note that is expects BP's total gross liability could be between $35 billion and $40 billion. Bank of America Merrill Lynch and Barclays Capital cut their investment ratings on the stock. Bank of America Merrill Lynch said the outcome of BP's meeting with the White House Wednesday "provides little comfort or clarity," and that the measures taken "will materially erode BP's competitive advantage versus peers for the foreseeable future." Barclays noted that the $20 billion figure for the escrow fund "acts as a signal of the company's commitment to 'make good' in the U.S.; hence, we should not see this figure as either a cap or floor with respect to cleanup and economic costs." Peter Tuz, president of Chase Investment Counsel, also said he is concerned about the lack of a cap on BP's liabilities. "That's the most worrisome thing I heard" coming out of BP's meeting at the White House, Tuz said. "It still leaves BP vulnerable to damages above and beyond $20 billion, if I understood correctly. They're not out of the woods yet." Tuz does not currently have any stock of bond holdings in BP, although he did have bond holdings until shortly after the oil spill. "We were a little concerned that the amount of BP's liability at the time was just unknowable," he said. "Bonds we buy for safety, so we just walked away from it." However, Wasif Latif, vice president of equity investments at USAA Investment Management, said his firm has not made any major changes to its bond and stock holdings in BP. To USAA, he said, the risks in the stock and bonds and the removal of the dividend still haven't amounted to enough for the firm to sell its BP stock and bond holdings. Some of USAA's stock holdings in BP are in index funds mimicking the FTSE 100 and the MSCI EAFE indexes, where the firm has no choice but to own BP as long as it is a part of those indexes. But its bond holdings as well as its other stock holdings are an active choice the firm has made because it considers the stock and bonds to be at attractive valuations for the long term. Still, Latif conceded that BP's stock and bonds are likely to be volatile in the near term. "The $20 billion they set aside, that puts to ease a little bit of the uncertainty, but I think the pressure on BP will continue until they stop the leak," he said. -By Donna Kardos Yesalavich, Dow Jones Newswires; 212-416-2188; donna.yesalavich@dowjones.com (END) Dow Jones Newswires June 17, 2010 13:08 ET (17:08 GMT)