(Updates to afternoon, adds analyst comment)
* Intel drops after launching $15 billion share sale
* Indexes: Dow down 0.3%, S&P 500 down 0.1%, Nasdaq down 0.4%
By Caroline Valetkevitch and Avinash P
Aug 10 (Reuters) – U.S. stocks edged lower in afternoon trading on Monday as hopes for an imminent deal to reopen the Strait of Hormuz faded and as Intel shares fell. U.S. President Donald Trump demanded that Iran pay compensation for the people he said it had killed in wars, attacks and protests.
U.S. crude oil jumped about 5% to settle at $82.13 a barrel. Easing energy flows through the Strait could mitigate concerns over heightened oil prices that have spurred inflation worries and bets on interest rate hikes by central banks worldwide. Also weighing on the market were shares of Intel, which were last down 3% after it said it was planning to raise $15 billion through a share sale.
The S&P 500 and the Dow had risen to record highs recently, mostly on the back of much stronger than expected earnings results.
“It’s record margins and record earnings. That’s just been the story of this market, and yet the overlay of the Iran conflict just pulls risk sentiment on and then pulls it off,” said Tom Hainlin, an investment strategist at U.S. Bank Wealth Management in Minneapolis.
“The direct impact is just the energy sector and … oil prices, and they’re just sticky here above where they were on February 27 before the conflict. So there’s clearly no transparency of the path to get back to where we were before the conflict started, and so that premium’s just being built in. So far, the world’s been able to work around it, but those workarounds don’t last forever.”
The Dow Jones Industrial Average fell 153.66 points, or 0.28%, to 53,883.83, the S&P 500 lost 7.12 points, or 0.09%, to 7,750.66 and the Nasdaq Composite lost 103.48 points, or 0.39%, to 26,587.14.
Reports later this week could offer clues on the Federal Reserve’s monetary policy path. Data on Friday that showed U.S. employers unexpectedly shed 23,000 jobs in July prompted traders to cut odds of a Federal Reserve interest-rate hike in September. Traders now price in a 44% chance of a rate hike in September, according to the CME FedWatch tool.
More quarterly results are on the agenda as well, including reports from semiconductor company Applied Materials and networking equipment maker Cisco.
About 85% of the 436 companies in the S&P 500 that have reported earnings so far this period have beaten estimates, according to LSEG data.
Declining issues outnumbered advancers by a 1.49-to-1 ratio on the New York Stock Exchange. There were 244 new highs and 125 new lows on the NYSE.
On the Nasdaq, 1,911 stocks rose and 2,797 fell as declining issues outnumbered advancers by a 1.46-to-1 ratio.
The S&P 500 posted 19 new 52-week highs and one new low while the Nasdaq Composite recorded 89 new highs and 65 new lows.
(Reporting by Caroline Valetkevitch in New York and Avinash P in Bengaluru; Additional reporting by Noel Randewich in San Francisco and Purvi Agarwal in Bengaluru; Editing by Maju Samuel and Matthew Lewis)
