(Recasts with preliminary close of trading)

* Intel ( INTC ) drops after launching $15 billion share sale

* Oil prices jump on worries about Strait of Hormuz

* Traders see 52% chance of Sept rate hike

By Caroline Valetkevitch and Noel Randewich

Aug 10 (Reuters) - The Nasdaq closed lower on Monday, with

declines in Intel ( INTC ) and other chipmakers, as investors became less

confident about a deal to reopen the Strait of Hormuz.

U.S. President Donald Trump demanded that Iran pay compensation

for the people he said it had killed in wars, attacks and

protests. Earlier, Iran called for Washington to meet

conditions, including recompensing Tehran for the damage caused

since the U.S. and Israel launched strikes on its territory more

than five months ago.

With investors less optimistic about a resolution of the

Middle East crisis, U.S. crude oil jumped about 5% to settle at

$82.13 a barrel. Reopening the flow of oil through the Strait

could mitigate concerns over heightened energy prices that have

spurred inflation worries and led to concerns that central banks

would have to raise interest rates.

Also weighing on the market were shares of Intel ( INTC ), which

fell after the chipmaker said it was planning to raise $15

billion through a share sale.

The S&P 500 notched a record-high close on Friday, helped by

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, a​n 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."

According to preliminary data, the S&P 500 lost 4.74

points, or 0.06%, to end at 7,753.13 points, while the Nasdaq

Composite lost 84.89 points, or 0.32%, to 26,605.73. The

Dow Jones Industrial Average fell 71.77 points, or 0.13%,

to 53,965.16.

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

52% 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 ( AMAT )

and networking equipment maker Cisco ( CSCO ).

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.