(Updates to afternoon, adds analyst comment)

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

* Oil prices jump

* 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 ( INTC ) 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 ( INTC ), 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, 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."

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 ( 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.

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.