* Brent crude near 7-year lows after OPEC's meeting last week
* Airline stocks jump on falling oil prices
* Keurig soars on $13.9 bln buyout offer
* Indexes down: Dow 0.94 pct, S&P 0.95 pct, Nasdaq 0.84 pct (Adds details, changes quote, updates prices)
By Tanya Agrawal
Dec 7 (Reuters) - Wall Street started the week in the red as energy and raw material stocks took a hit, with oil prices falling to their lowest in nearly seven years.
Brent crude prices dropped to $41.38 and U.S. crude fell to $38.15 a barrel, after OPEC's meeting ended last week without a reference to its output ceiling.
A stronger dollar also made it more expensive to hold crude positions. The dollar rose for a second day and was up 0.3 percent at 98.64 against a basket of major currencies.
Oil majors Exxon and Chevron fell about 4 percent and were the biggest drags on the Dow and the S&P, while Dow Chemicals and DuPont fell more than 2 percent.
The impact of the fall in oil prices offset some of Friday's gains that were triggered by a strong jobs report.
The solid November employment report showed that the economy was strong enough to absorb an interest rate hike, which is widely expected to be raised when the Federal Reserve meets on Dec. 15-16.
"The Fed is pretty locked in regarding a hike next week and any fall in commodity prices will be seen as transitory factors," said Art Hogan, chief market strategist at Wunderlich Securities in New York.
However, Hogan said a further plunge in oil prices and a stronger dollar could mean subsequent rate hikes will be gradual.
At 11:03 a.m. ET (1503 GMT) the Dow Jones industrial average was down 167.26 points, or 0.94 percent, at 17,680.37, the S&P 500 was down 19.85 points, or 0.95 percent, at 2,071.84 and the Nasdaq Composite was down 43.41 points, or 0.84 percent, at 5,098.86.
Eight of the 10 major S&P sectors were lower, with the energy index falling 4.3 percent, putting it on track for its biggest single-day decline since the end of August.
Falling oil prices helped airline stocks, with JetBlue Airways up 5.7 percent and Republic Airways up 4.5 percent. The S&P 1500 airlines index hit its highest level since January.
Atlanta Fed President Dennis Lockhart told CNBC in an interview on Monday that the economic conditions are satisfactory and the market is well-prepared for a hike.
Lockhart is a voting member of the central bank's policy setting committee.
Traders see a 79 percent chance that the central bank will increase rates for the first time in nearly a decade, according to the CME Group's FedWatch.
Keurig Green Mountain's shares soared 73.3 percent to $89.60 after the coffee-pod maker agreed to be bought for about $13.9 billion.
Chipotle Mexican Grill fell 4 percent to $538, after the popular burrito chain warned that sales at established restaurants would fall in the fourth quarter due to the impact of an E. coli outbreak.
Declining issues outnumbered advancing ones on the NYSE by 2,493 to 458. On the Nasdaq, 2,041 issues fell and 605 advanced.
The S&P 500 index showed 12 new 52-week highs and 27 new lows, while the Nasdaq recorded 42 new highs and 124 new lows. (Reporting by Tanya Agrawal; Editing by Anil D'Silva)