Wall St drops on global demand concerns

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks were sharply lower on Tuesday on concerns about the impact of lower oil prices on the global economy and the effect of political turmoil in Greece on the euro zone.

Brent crude touched a fresh five-year low of $65.29 on Tuesday and was last down 0.3 percent to $65.97. Oil prices have been under pressure as the dollar has strengthened and OPEC decided against an output cut.

"It's oil, oil and more oil, and all eyes are on oil here because, even though it certainly does support the economic momentum driven by the consumer, it certainly does detract from the cyclical sectors of the market," said Anastasia Amoroso, Global Market Strategist at J.P. Morgan Funds in New York.

"Until we see stabilization in the price of oil, it's difficult to see a stabilization in the price of energy shares, so that will continue to weigh on the market."

Political unrest in Greece also brought about investor nervousness after the government brought a presidential vote forward in a political gamble that raised uncertainty over the country's transition out of its bailout.

The Shanghai Composite Index dropped more than 5 percent, its biggest drop in more than five years, also weighing on investor sentiment.

Adding to the cautious tone was speculation if the U.S. Federal Reserve will change its language to keep rates near zero for a "considerable time" when policymakers meet next week after the strong jobs report on Friday.

The Dow Jones industrial average fell 157.13 points, or 0.88 percent, to 17,695.35, the S&P 500 lost 18.81 points, or 0.91 percent, to 2,041.5 and the Nasdaq Composite dropped 52.00 points, or 1.1 percent, to 4,688.69.

The benchmark S&P index fell 0.7 percent on Monday, its biggest drop since Oct. 22. The S&P 500 has climbed for seven straight weeks, and is up 9.6 percent from its October low after a drop of 1.6 in the past two sessions.

In a relatively light week for economic data, wholesale trade data for October is due at 10 a.m. (1500 GMT). Expectations call for inventories to rise 0.2 percent, while sales are expected to rise by 0.1 percent.

U.S.-listed shares of Seadrill gained 4.1 percent to $12.05. John Fredriksen, the biggest owner of the offshore driller, purchased another 1.3 million shares in the firm to raise his stake to 119 million shares, or 24.15 percent.

Shares in bluebird bio surged 56 percent to $76.25 after the company said a study for its blood disorder treatment showed patients were essentially cured.

Conn's Inc plunged 37.8 percent to $21.81 after the home appliance retailer posted a third-quarter loss and withdrew its 2015 outlook. In addition, the company said its CFO Brian Taylor had resigned.

Declining issues outnumbered advancing ones on the NYSE by 2,273 to 553, for a 4.11-to-1 ratio; on the Nasdaq, 1,881 issues fell and 445 advanced for a 4.23-to-1 ratio.

The S&P 500 was posting 8 new 52-week highs and 15 new lows; the Nasdaq Composite was recording 6 new highs and 111 new lows.

(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama and Nick Zieminski)