Energy leads Wall Street lower, Wal-Mart falls on results

NEW YORK (Reuters) - U.S. stocks fell on Thursday, with energy shares leading the way lower amid a sharp decline in oil prices, while continued uncertainty over the prospects of a debt deal with Greece added to the cautious tone.

Losses were outsized in the Dow after Wal-Mart Stores cut its sales outlook, citing the impact of a stronger dollar. Shares fell 2.7 percent to $83.97.

On the upside, Priceline Group rallied on its results, helping keep the Nasdaq slightly positive.

Crude oil fell 4.7 percent to $49.69 as another big weekly build in U.S. crude inventories and possible rise in Saudi output fueled concerns about oversupply.

The S&P Energy index <.SPNY> fell 1.9 percent, by far the biggest decliner among the 10 primary S&P sectors, nine of which were lower on the day. Exxon Mobil fell 1.2 percent to $89.95 while Halliburton Co was off 2.2 percent to $43.43 and ConocoPhillips fell 2.2 percent to $66.25.

"There's still a lot of supply, even though we're looking at a decline in rig counts and expenditures. Right now, the majority view is that oil won't really start to go up until the middle of the year," said Clem Miller, portfolio manager at Wilmington International Funds in Baltimore, Maryland.

The decline in energy prices has severely hurt oil companies, with many cutting 2015 spending plans in a bearish sign for economic growth prospects. Late Wednesday, Marathon Oil said it would cut its 2015 capital budget by 20 percent, the second cut of that magnitude since December, sending shares down 2.8 percent to $28.22.

In Europe, the German finance ministry rejected a new proposal from Athens for an extension of its bailout program, saying it fell short of the conditions set out by the country's euro zone partners. On Wednesday, a Greek government spokesperson said the country aimed to conclude a deal with its euro zone partners "soon."

"At this point, it's hard to see the Greece situation having a dramatic impact on the U.S. outside of just creating a lot of volatility," said Miller, who helps oversee about $80 billion in assets under advisement.

Priceline jumped 7.1 percent to $1,202 after the online travel agency reported better-than-expected quarterly earnings.

In the latest economic data, initial jobless claims fell more than expected in the latest week, offering fresh evidence that the labor market was gathering steam. Separately, a regional Federal Reserve survey showed growth in factory activity in the U.S. mid-Atlantic region decelerated in February to its slowest level in a year.

The Dow Jones industrial average <.DJI> fell 85.31 points, or 0.47 percent, to 17,944.54, the S&P 500 <.SPX> lost 5.87 points, or 0.28 percent, to 2,093.81 and the Nasdaq Composite <.IXIC> added 6.09 points, or 0.12 percent, to 4,912.45.

Declining issues outnumbered advancing ones on the NYSE by 1,878 to 924, for a 2.03-to-1 ratio; on the Nasdaq, 1,288 issues fell and 1,024 advanced, a 1.26-to-1 ratio.

The S&P 500 was posting 37 new 52-week highs and 1 new lows; the Nasdaq Composite was recording 52 new highs and 11 new lows.

(Editing by Nick Zieminski)

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