* U.S. data adds to growth worries
* S&P energy, materials and financial sectors lower
* Indexes down: Dow 0.73 pct, S&P 0.82 pct, Nasdaq 1.04 pct (Updates to late afternoon)
By Marcus E. Howard
July 5 (Reuters) - Wall Street stocks fell in afternoon trading on Tuesday as investors faced continued uncertainty in Europe and tumbling oil prices weighed on energy shares.
The Bank of England said the outlook for Britain's financial stability after its June 23 vote to leave the European Union, dubbed Brexit, was "challenging" and said it would lower the amount of capital that banks were required to hold in reserve in order to allow them to keep lending.
"After a surprisingly big bounce last week, I think we're in a little bit of a risk-off trading today - the uncomfortable feeling that maybe all is not fully well given Brexit," said Jeffrey Carbone, senior partner, Cornerstone Financial Partners, in Cornelius, North Carolina.
Seven of the 10 major S&P sectors were lower. The energy sector fell 2.4 percent. The materials index was down 2 percent.
The financial sector was down 1.9 percent with JPMorgan, Wells Fargo and Citigroup falling between 2.4 and 3.8 percent.
Oil prices also slipped more than $2 per barrel as a potential economic slowdown weighed on prospects for demand.
Tepid U.S. data added to overall growth worries. Data showed new orders for U.S. factory goods fell in May on weak demand for transportation and defense capital goods.
New orders for manufactured goods declined 1.0 percent after two straight months of increases, according to the U.S. Commerce Department.
At 2:20 p.m. (1820 GMT), the Dow Jones industrial average was down 130.39 points, or 0.73 percent, to 17,818.98, the S&P 500 had lost 17.28 points, or 0.82 percent, to 2,085.67 and the Nasdaq Composite had dropped 50.52 points, or 1.04 percent, to 4,812.04.
Investors have been seeking safe-haven assets in an uncertain economic environment. Weak data from China added to the nervousness stemming from Britain's vote to leave the EU.
Data from China showed services sector activity hit an 11-month high in June but a composite measure of activity including manufacturing fell to its lowest in four months.
Tesla's shares fell 1.8 percent to $212.67 after the electric car maker missed vehicle delivery targets for the second consecutive quarter.
Netflix rose 0.8 percent to $97.45 after it reached an agreement with Comcast for its services to be available on the cable company's set-top box. Comcast was down 1 percent at $64.60.
Declining issues outnumbered advancers on the NYSE by 2,267 to 742, for a 3.06-to-1 ratio on the downside; on the Nasdaq, 2,075 issues fell and 717 advanced for a 2.89-to-1 ratio favoring decliners.
The S&P 500 posted 66 new 52-week highs and one new low; the Nasdaq recorded 61 new highs and 29 new lows. (Additional reporting by Yashaswini Swamynathan and Tanya Agrawal in Bengaluru; Editing by Don Sebastian and James Dalgleish)