US STOCKS-Wall Street falls as energy sector weighs

* Brent crude hits new five-year low

* Costco, Toll Brothers (NYSE: TOL - news) post quarterly results

* Indexes off: Dow 0.63 pct, S&P 0.58 pct, Nasdaq 0.31 pct (Updates to market open)

By Chuck Mikolajczak

NEW YORK, Dec (Shanghai: 600875.SS - news) 10 (Reuters) - U.S. stocks were lower shortly after the opening bell on Wednesday, weighed down by a sharp decline in the energy sector as oil prices slumped.

The S&P energy index was off 2.2 percent as the worst performing S&P sector as Brent crude touched a new five-year low of $65.24 after producers forecast lower demand for their oil next year.

The sector is the worst performing of the 10 major S&P sectors for the year and the only group in negative territory. Falling oil prices have raised concerns about earnings for energy companies, with year-end tax selling bringing additional pressure on the group.

"Energy is such a broad sector and yet the group as a whole has captured the imagination of investors by its overall weakness," said Eric Weigand, senior portfolio manager at the Private Client Reserve of U.S. Bank in New York.

"Investors are really going through the space and trying to discern where the quality is and where the companies with strong balance sheets to sustain through the volatility are."

After climbing to its most recent record high on Friday, the S&P 500 has fallen 1.4 percent and is now up 9.9 percent from its October low.

The Dow Jones industrial average fell 111.76 points, or 0.63 percent, to 17,689.44, the S&P 500 lost 11.87 points, or 0.58 percent, to 2,047.95 and the Nasdaq Composite dropped 14.60 points, or 0.31 percent, to 4,751.87.

Costco Wholesale Corp rose 1.3 percent to $144.91 after it reported a better-than-expected quarterly profit as increased promotions helped the warehouse club operator deal with fierce competition.

Toll Brothers lost 0.8 percent to $34.52 after the homebuilder posted its quarterly results. The PHLX housing sector index shed 0.5 percent.

Yum Brands Inc lowered its profit forecast for the year for the second time, hurt by slower-than-expected sales recovery in China following a food safety scare in July. Its shares slumped 3.7 percent to $72.45.

Declining issues outnumbered advancers on the NYSE by 2,038 to 730, for a 2.79-to-1 ratio; on the Nasdaq, 1,495 issues fell and 737 advanced for a 2.03-to-1 ratio.

The S&P 500 was posting 10 new 52-week highs and 17 new lows; the Nasdaq Composite was recording 36 new highs and 30 new lows. (Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama and Nick Zieminski)