* Oil prices fall more than 4 pct
* Saudi oil minister rules out production cut
* Fitbit sinks after weak forecast
* Indexes down: Dow 1.04 pct, S&P 1.11 pct, Nasdaq 1.27 pct (Adds details, changes comment, updates prices)
By Abhiram Nandakumar
Feb 23 (Reuters) - Wall Street fell on Tuesday, led by materials and financial stocks, as yet another rally failed to take off in what has been a turbulent year for financial markets.
Volatile oil prices have influenced the direction of stocks, pushing the S&P 500 down about 5 percent this year.
Stock market rallies have been few and short-lived, with the S&P 500 and the Dow Jones industrial average having risen for three days in a row only once in the past two months.
The steep fall in oil prices is starting to hurt other sectors, with banks bracing for a wave of potential defaults from energy companies.
The S&P financial sector has been the worst performer among the 10 major sectors this year, declining more than 10 percent.
JP Morgan, the largest U.S. bank, said on Tuesday it would set aside another $500 million to cover losses stemming from the energy sector. Its shares were down 3.9 percent at $56.27.
"The market is still groping for direction," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
"You still see this hypersensitivity to what's going on with the price of oil and the market's reacting on a day-to-day basis to that. It really shouldn't, but it gives you a sense of the nervousness out there," he said.
Crude prices fell more than 4 percent after Saudi Oil Minister Ali Al-Naimi ruled out any production cuts.
Shares of Chevron fell 2.8 percent, while Exxon was off 1.1 percent.
At 11:21 a.m. ET (1621 GMT), the Dow Jones industrial average was down 172.89 points, or 1.04 percent, at 16,447.77.
The S&P 500 was down 21.6 points, or 1.11 percent, at 1,923.9 and the Nasdaq Composite index was down 58.13 points, or 1.27 percent, at 4,512.48.
Nine of the 10 major S&P sectors were lower, led by a 2.43 percent fall in the energy sector. Financial stocks were off 1.94 percent.
Mixed data on Tuesday offered little cheer, with consumer confidence falling to its lowest since July, but U.S. home resales unexpectedly rising in January.
Fitbit sank 20 percent to $13.27 after the wearable fitness device maker forecast profit below estimates.
Western Digital dropped 5.3 percent to $43.64 after a government watchdog derailed an investment in the company by China's Unisplendour. Western Digital cut its offer for SanDisk as a consequence. SanDisk was down 2.1 percent.
Declining issues outnumbered advancing ones on the NYSE by 2,077 to 836. On the Nasdaq, 1,741 issues fell and 839 advanced.
The S&P 500 index showed seven new 52-week highs and no new lows, while the Nasdaq recorded 17 new highs and 29 lows. (Reporting by Abhiram Nandakumar in Bengaluru; Editing by Saumyadeb Chakrabarty)