Dow, S&P 500 edge down on global worries; Nasdaq climbs

The Dow and S&P 500 fell on Tuesday following concerns about global weakness and political turmoil, while the Nasdaq edged higher along with tech shares and energy.

All three indexes pared losses after midday, with the S&P 500cutting its decline in half. Apple (AAPL.O) shares were up 0.5 percent and among the biggest boosts to the S&P 500 and Nasdaq. Advancing issues now outnumber declining ones on the NYSE by 1,654 to 1,416, for a 1.17-to-1 ratio.

Small-cap stocks also bounced, with the Russell 2000 index .TOY last up 1.4 percent.

"The market in general is digesting a very big move since its October 15 low," said Adam Sarhan, chief executive of Sarhan Capital in New York. "Less than two moths ago we were flat for the year, so investors are very hypersensitive to potential downdrafts in the market at this stage in the game."

Brent crude LCOc1 rebounded to climb 0.9 percent after it touched a fresh five-year low of $65.29. 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&Penergy index .SPNY was up 0.5 percent after losing 3.9 percent on Monday.

U.S. telecom stocks led losses on the S&P 500 following concerns about an industry price war after Verizon Communications (VZ.N) 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 2:53 p.m., the Dow Jones industrial average .DJI fell 91.58 points, or 0.51 percent, to 17,760.9, the S&P 500 .SPX lost 7.22 points, or 0.35 percent, to 2,053.09 and the Nasdaq Composite .IXIC added 8.73 points, or 0.18 percent, to 4,749.42.

Greece unnerved investors 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 over whether the U.S. Federal Reserve will change its pledge to keep rates near zero for a "considerable time" when policymakers meet next week.

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.

The S&P 500 was posting 28 new 52-week highs and 16 new lows; the Nasdaq Composite was recording 74 new highs and 146 new lows.