Wall St down sharply on oil drop, global growth worries

By Yashaswini Swamynathan

(Reuters) - Global growth worries and a sharp drop in oil prices sent jitters through Wall Street, leading the three major U.S. indexes lower for the second straight day on Friday.

Despite higher demand, oil eased as traders booked profits after a three-day winning streak that started Monday and pushed prices to 2016 highs, and as the dollar moved higher. [O/R]

Financial stocks came under pressure again as global issues, including uncertainty over interest rate hikes and the impending vote on Britain's membership in the European Union, sent investors flocking to safe haven assets.

The yield on government bonds fell globally, while gold prices held near a three-week high.

"The U.S. indexes are trailing what is happening overseas this morning. We've seen a decline in crude prices and strength in U.S. treasuries and that combination adds ups to a red day," said Paul Springmeyer, investment management director at U.S. Bank Wealth Managing in Minneapolis.

"There still remains quite a bit of uncertainty out there ... and returns will be fairly muted until those question marks are resolved" Springmeyer said.

At 11:15 a.m. ET (1513 GMT) the Dow Jones Industrial Average was down 68.69 points, or 0.38 percent, at 17,916.5.

The S&P 500 was down 12.47 points, or 0.59 percent, at 2,103.01.

The Nasdaq Composite was down 43.08 points, or 0.87 percent, at 4,915.53.

Despite the losses since Thursday, the S&P and Dow were still on track to close higher for the week, but the Nasdaq moved into the red.

Eight of the 10 S&P sectors were lower, led by a 1.1 percent drop in the financials index.

The index is now down nearly 3 percent for the year, making it the worst performing index. The healthcare index also moved into negative territory for the year.

Goldman Sachs fell 1.5 percent and was the biggest drag on the Dow.

There were a few rare bright spots in the market.

Intel shares reversed course to trade up 0.2 percent after it won a contract to supply chips for some Apple iPhones, Bloomberg said. Intel will replace Qualcomm, which was down 1.2 percent.

Drugstore operator Walgreens rose 5 percent and its acquisition target Rite Aid was up 3.6 percent after the New York Post said there were signs the FTC would approve the deal. Walgreens gave the biggest boost to the S&P and the Nasdaq.

Declining issues outnumbered advancing ones on the NYSE by 2,186 to 691. On the Nasdaq, 2,000 issues fell and 638.

The S&P 500 index showed 29 new 52-week highs and no new lows, while the Nasdaq recorded 18 new highs and 32 new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza)