The S&P 500 closed down 10.2 points, or 0.49 percent, at 2,080.35, with utilities the greatest laggard as all 10 sectors declined.
The Nasdaq closed down 29.4 points, or 0.61 percent, at 4,777.44.
The Russell 2000 closed below its record set on Monday.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 16.
Crude oil futures for February gained 51 cents to settle at $54.12 a barrel on the New York Mercantile Exchange. Brent oil recovered from an earlier 5-½-year low below $57 per barrel that was touched despite ongoing output disruptions in Libya.
Gold futures recovered all of Monday’s losses to settle up $18.50, or 1.57 percent, to $1,200.40 an ounce.
American Realty surged to close up more than 7 percent on activist investor Corvex’s disclosure of a 7.1 percent stake in the real estate investment consulting group.
Fast casual chain Chipotle closed down 1.12 percent while maintaining a near 30 percent gain for the year.
Head of UBS floor operations Art Cashin rang the opening bell at the New York Stock Exchange to celebrate 50 years to the day of working on the trading floor.
Read MoreHappy 50th anniversary to Art Cashin
U.S. stock index futures pointed to a lower open on Tuesday, as oil prices continued to weaken and Greek news remained a focal point.
“While European markets continue to react to yesterday’s Greek news, I think the biggest market risk going forward for the rest of us is not what happens politically or economically in Greece…but if the goings on there instead impacts what the (European Central Bank) wants to do going forward,” Boockvar said in a note.
The Greek parliament, for a third time, failed to elect a new president on Monday, meaning a general election has been called for January 25. There are worries that far-left anti-austerity party Syriza could win, with polls showing that the party has a narrow lead, according to Reuters.
Athens’ main stock exchange, which ended almost 4 percent lower on Monday, pared losses to close about 0.45 percent lower.