By Abhiram Nandakumar
REUTERS - Wall Street was lower in early trading on Tuesday, failing to sustain yet another rally in what has been a turbulent year so far, as prices of oil and other commodities resumed their declines.
Stocks have moved in tandem with volatile oil prices, which are hovering near multi-year lows, as investors see tepid demand for energy as a sign of broader global economic weakness.
The S&P financial sector has been the worst performer among the 10 major sectors this year as banks brace for a wave of potential defaults by energy companies.
JP Morgan said on Tuesday it would set aside an additional $500 million to cover losses stemming from the energy sector. Its shares were down 2 percent at $57.40.
Crude oil and metal prices resumed their slide on Tuesday, while gold recovered some ground.
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"(The market is) still groping for direction," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
"You still see this hypersensitivity to what's going on with the price of oil and the market's reacting on a day-to-day basis to that. It really shouldn't, but it gives you a sense of the nervousness out there," he said.
At 9:34 a.m. ET (1434 GMT), the Dow Jones industrial average was down 61.74 points, or 0.37 percent, at 16,558.92.
The S&P 500 was down 9.22 points, or 0.47 percent, at 1,936.28 and the Nasdaq Composite index was down 22.18 points, or 0.49 percent, at 4,548.43.
Eight of the 10 major S&P sectors were lower. Materials and financials fell nearly 1 percent, while energy stocks were down 0.83 percent.
U.S. stocks closed higher on Monday, extending last week's gains after strong labor and inflation data. Still, the S&P 500 is down 4.8 percent this year.
Uncertainty surrounding monetary policy has also curbed investors' appetite for risk.
While Fed Chair Janet Yellen has said the central bank will analyze data and global financial and economical conditions before making a decision on interest rates, other policymakers seem to be at odds.
Investors will watch for comments by Fed Vice Chair Stanley Fischer and Minneapolis Fed President Neel Kashkari later in the day for clues on the Fed's view on the U.S. economy.
Also keenly watched will be economic data, including reports on U.S. home resales and consumer confidence at 10 a.m. ET (1500 GMT). Existing homes sales are forecast to have declined 2.9 percent in January, while consumer confidence likely fell in February on account of the stock market rout.
Fitbit sank 14 percent to $14.30 after the wearable fitness device maker forecast profit below estimates.
Western Digital dropped 5.8 percent to $43.44 after a government watchdog derailed an investment in the company by China's Unisplendour.
Declining issues outnumbered advancing ones on the NYSE by 1,680 to 896. On the Nasdaq, 1,227 issues fell and 878 advanced.
The S&P 500 index showed four new 52-week highs and no new lows, while the Nasdaq recorded four new highs and 11 lows.
(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Saumyadeb Chakrabarty)