* Energy shares rebound
* Indexes: Dow down 0.7 pct, S&P down 0.9 pct, Nasdaq down 1.2 pct (Updates to close)
By Caroline Valetkevitch
NEW YORK, Dec 16 (Reuters) - U.S. stocks fell for a third day in a volatile session Tuesday, led by declines in consumer discretionary and technology shares, while another drop in the Russian rouble added to worries about the global economy.
Energy shares rebounded, keeping the S&P 500 and Dow mostly in positive territory until a bout of late-day selling took indexes lower. The S&P 500 moved more than 44 points from its high of the day to its low, while the CBOE Volatility index jumped 15.4 percent.
The Russian rouble hit new lows against the dollar following oil's extended selloff, before rebounding. Brent and U.S. crude oil's more than 50 percent drop since June have put global demand at the forefront of concerns for investors.
"The market is kind of in this push-pull. Traditionally, this time of year is a strong season. People buy stocks that have done well so you get this bump up," said Daniel Morgan, senior portfolio manager at Synovus Trust Company in Atlanta.
"But you've got the market being pulled back by the prices in oil continuing to fall and the ramifications associated with that."
Shares of Microsoft, down 3.2 percent at $45.16, and Amazon, down 3.6 percent at $295.06, were the biggest drags on the S&P 500, while energy shares gave the index its biggest boost. The energy index ended up 0.7 percent but is down about 16.6 percent for the year.
The Dow Jones industrial average fell 111.97 points, or 0.65 percent, to 17,068.87, the S&P 500 lost 16.89 points, or 0.85 percent, to 1,972.74 and the Nasdaq Composite dropped 57.32 points, or 1.24 percent, to 4,547.83.
Shares of PepsiCo, which had 7.4 percent of 2013 revenue from Russia, fell 1.6 percent to $92.59. Apple, down 1.4 percent at $106.75, confirmed it has taken down its online store in Russia due to extreme fluctuations in the rouble.
Chevron, up 0.8 percent at $101.70, helped lead the points advance in the energy sector. Chevron's forward price-to-earnings ratio was at 13.6 at the close on Monday, compared to the S&P 500's 16.1, meaning investors pay less for every dollar of Chevron's earnings than they do for the S&P 500 overall.
Among top percentage gainers, Nabors Industries, up 2.2 percent at $10.51, had a forward P/E of 8.6, while Denbury Resources' P/E was 8.9. Denbury rose 7.3 percent.
Early in the session, bets on the Federal Reserve's next move provided some support. Fed officials will decide this week whether to make a critical change to their policy statement that would widen the door for interest rate hikes next year. In October, The Fed repeated that benchmark rates were unlikely to rise for a "considerable time."
About 9.3 billion shares changed hands on U.S. exchanges, well above the 7.1 billion average this month, according to BATS Global Markets.
Declining issues outnumbered advancing ones on the NYSE 1,790 to 1,288, for a 1.39-to-1 ratio; on the Nasdaq, 1,500 issues fell and 1,223 advanced for a 1.23-to-1 ratio. (editing by Chizu Nomiyama, Nick Zieminski and Meredith Mazzilli)