US STOCKS-Wall St drops after Saudi attacks; energy stocks limit losses

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* Energy sector jumps more than 2%
* Airlines, cruise operators fall on cost concerns
* Defense cos rise amid geopolitical tensions
* United Auto Workers call for strike on GM; shares fall
* Indexes down: Dow 0.49%, S&P 0.35%, Nasdaq 0.30%

(Changes comment, adds details; Updates prices)
By Medha Singh and Ambar Warrick
Sept 16 (Reuters) - U.S. stocks fell on Monday on global
growth worries after weekend attacks on Saudi Arabia's crude
facilities hit 5% of the world's supply, but a sharp jump in
crude prices lifted beaten-down energy stocks and kept losses in
check.
The attack on the world's biggest oil exporter sent oil
prices up more than 20% before easing as various nations said
they would tap emergency reserves to ensure stable supplies.
O/R
The S&P 500 energy .SPNY , one of the worst performing
sectors so far this year, soared 2.36%. Shares of Apache Corp
APA.N , Marathon Oil Corp MRO.O and Hess Corp HES.N jumped
between 8.8% and 10.1% and were the leading gainers on the
benchmark index.
"The oil spike - higher prices globally - could slow world
spending on items other than oil and that's the main concern,"
said Rick Meckler, partner at Cherry Lane Investments, a family
investment office in New Vernon, New Jersey.
Market spotlight shifted to the drone attacks from this
week's centerpiece, the U.S. Federal Reserve's two-day monetary
policy meeting where expectations of a quarter point interest
rate cut remain high.
Anticipation of higher fuel costs drove down shares of
airlines and cruise line operators. American Airlines Group Inc
AAL.O , Delta Air Lines Inc DAL.N and Carnival Corp CCL.N
fell between 2.2% and 5.1%.
Investors' flight to safety pulled the U.S. benchmark
10-year Treasury bond yields US10YT=RR down from their
multi-week highs, sending the interest-rate sensitive bank
sub-sector .SPXBK down about 0.6%. US/
Shares of defense companies Raytheon RTN.N , Lockheed
Martin Corp LMT.N , Northrop Grumman Corp NOC.N rose between
1.1% and 2.6%. J.P. Morgan upgraded Raytheon shares to
"overweight".
At 11:34 a.m. ET, the Dow Jones Industrial Average .DJI
was down 133.39 points, or 0.49%, at 27,086.13, the S&P 500
.SPX was down 10.50 points, or 0.35%, at 2,996.89. The Nasdaq
Composite .IXIC was down 24.42 points, or 0.30%, at 8,152.29.
Nine of the 11 major S&P sectors were trading lower.
Wall Street's more than a decade-long rally continues to
hinge on whether the Fed will keep cutting interest rates and on
the progress in U.S.-China trade talks. The recent easing in
trade tensions has brought the benchmark S&P 500 .SPX about 1%
below its record high.
Among other movers, General Motors Co GM.N fell 3.1% after
the United Auto Workers (UAW) went on strike on Sunday, the
first nationwide strike at GM in 12 years. Advancing issues outnumbered decliners by a 1.14-to-1 ratio
on the NYSE and a 1.14-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and one new
lows, while the Nasdaq recorded 32 new highs and 17 new lows.