Dow, S&P 500 down but off day's lows; Nasdaq edges up

NEW YORK (Reuters) - The Dow and S&P 500 were down but well off the day's lows in early afternoon trading on Tuesday, helped by gains in tech and energy shares, while the Nasdaq edged higher.

All three indexes pared losses after midday, with the S&P 500 cutting its decline in half. Apple shares were up 0.7 percent and among the biggest boosts to the S&P 500 and Nasdaq.

Brent crude rebounded to climb 0.3 percent after it touched a fresh five-year low of $65.29 on Tuesday. Oil prices have been under pressure as the dollar strengthened and OPEC decided against an output cut, with Brent down more than 40 percent from its June high. The S&P energy index <.SPNY> was up 0.3 percent after losing 3.9 percent on Monday.

Concerns about the impact of lower oil prices on the global economy and political turmoil in Greece weighed on the market.

For the S&P 500, the drop in oil has weighed heavily on earnings estimates for energy companies.

"The negative impact for energy earnings by far outweighs the positive impact for the rest of the S&P," Dan Suzuki, senior U.S. equity strategist at Bank of America-Merrill Lynch in New York, said at the bank's outlook conference Tuesday.

Shares of U.S. telecom stocks led losses on the S&P 500 following concerns about an industry price war after Verizon Communications warned that promotions in its wireless business would bite into its fourth-quarter profit. The S&P telecom index <.SPLRCL> was down 3.2 percent while Verizon shares were down 4.2 percent, the biggest drag on both the Dow and S&P 500.

At 1:22 p.m., the Dow Jones industrial average <.DJI> fell 88.98 points, or 0.5 percent, to 17,763.5, the S&P 500 <.SPX> lost 6.39 points, or 0.31 percent, to 2,053.92 and the Nasdaq Composite <.IXIC> added 7.28 points, or 0.15 percent, to 4,747.98.

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.

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

After its seventh straight weekly gain, the S&P 500 is up 9.5 percent from its October low, but down 1.7 percent in the past two sessions.

Declining issues outnumbered advancing ones on the NYSE by 1,691 to 1,343, for a 1.26-to-1 ratio; on the Nasdaq, 1,435 issues rose and 1,218 fell for a 1.18-to-1 ratio favoring advancers.

The S&P 500 was posting 23 new 52-week highs and 16 new lows; the Nasdaq Composite was recording 33 new highs and 139 new lows.

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

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