By Donna Kardos Yesalavich Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--BP PLC's (BP, BP.LN) shares fell Tuesday in trading that investors said was driven more by "selling on the news" following Monday's gains in anticipation of the oil giant's second-quarter report and chief executive shuffle rather than by any disappointment over the announcements themselves. BP's shares are still up on the week in both London and the U.S., with Tuesday's slip erasing only part of Monday's gain in both markets. Meanwhile, options activity is tilted to the optimistic side Tuesday, with more volume in calls, which convey the right to buy shares, than in puts, which convey the right to sell shares. In addition, the annual cost of buying protection against default on $10 million in BP debt over a five-year period fell Tuesday to $328,000, down from $340,000 on Monday and $349,000 last week, according to Markit. Tuesday morning, BP posted a $17.15 billion loss for the second quarter as it made provision for $32.2 billion dollars in costs related to the Gulf of Mexico oil spill. Meanwhile, the company announced that Chief Executive Tony Hayward will step down on Oct. 1, to be replaced by Robert Dudley, the executive director currently heading up the company's oil spill response. The company also announced plans to sell about $30 billion in assets, leaving BP smaller and focused on restoring its battered reputation. Investors found the moves, which had largely been anticipated, encouraging. "You're looking at a company with vast resources that made it clear after the initial fumbling with the situation that they were going to do the right thing," said Michael Cavanaugh, president of Know Your Options Inc. Cavanaugh said his firm hasn't touched the stock as it has been too volatile for its clients. However, if he could, "I'd be leaning to the long side," Cavanaugh said. Still, analysts cautioned that BP's shares are likely to remain under pressure over the near term. While Standard & Poor's Equity Research called Dudley "an American who could probably better navigate US politics and communication channels," the firm also warned, "we expect the shares to trade below our estimate of their underlying value until uncertainty surrounding litigation and the US government position on BP's US operations eases." Analysts at Charles Stanley, meanwhile, reminded clients "the longer term effects of the disaster of still unclear and when BP returns to paying dividends, we do not anticipate such a high payout." Collins Stewart told clients it expects BP's shares to climb if the company is able to fully seal the Macondo well in the next weeks, but it doesn't see much upside past the $42 level. BP's U.S. shares were off 1.2% at $38.20 in recent trading following its 4.9% Monday jump. After sinking to a 14-year low last month, the stock has recovered about a third of its 33-point drop from the April 20 explosion of the Deepwater Horizon rig to its June low. The London shares closed 2.6% lower, wiping out about half of their Monday climb. -By Donna Kardos Yesalavich, Dow Jones Newswires; 212-416-2188; donna.yesalavich@dowjones.com (James Herron contributed to this article.) (END) Dow Jones Newswires July 27, 2010 13:09 ET (17:09 GMT)