Wall St lower; Dow sets course for fourth week of loss

By Tanya Agrawal

(Reuters) - U.S. stocks fell in late morning trading on Monday as investors weighed the prospect of the Federal Reserve raising interest rates as soon as September, after Friday's strong jobs report.

The declines put the Nasdaq and S&P 500 on course for their third week of losses in a row and the Dow for its fourth.

The stronger-than-expected jobs data for May and a pickup in wages were the latest signs of improved momentum in the economy, prompting expectations of a rate hike coming sooner rather than later.

While the Fed is broadly expected to raise rates this year, the timing of the move has kept the market on tenterhooks. Most economists expect a rate hike in September, followed by another one before the end of the year, according to a Reuters poll.

"Complacency, apathy and uncertainty are all among terms that may appropriately describe investor sentiment right now," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

"Volatility is apt to increase in July and August as the market moves through the historical dog days of summer, waits for the second-quarter results and importantly transitions to a likely Fed move in September."

The dollar retreated after a report - later denied - that President Barack Obama had expressed concern over its strength after a year-long rally.

At 11:10 a.m. ET (1510 GMT) the Dow Jones industrial average was down 27.33 points, or 0.15 percent, at 17,822.13, the S&P 500 was down 4.54 points, or 0.22 percent, at 2,088.29 and the Nasdaq Composite was down 16.15 points, or 0.32 percent, at 5,052.31.

Eight of the 10 major S&P sectors were lower, with the technology index's 0.79 percent drop leading the losses. Facebook's 1.1 percent fall to $81.24, weighed the most on the index.

Airlines stocks fell 4.5 percent, with JetBlue slumping 6 percent, after Qatar Airways asked the industry's largest trade group to reiterate its support of liberal air travel.

Tesla rose 3.6 percent to $258.14 after plans for its Gigafactory got a boost from Panasonic's move to start sending its employees to the plant, with manufacturing expected to begin next year.

Dow component McDonald's inched up before reversing course to trade marginally lower at $95.45 after the company's sales fell less than expected in May.

Sears Holdings' shares fell 2.5 percent to $39.73 after its quarterly sales continued to tumble.

Declining issues outnumbered advancers on the NYSE by 1,807 to 1,061, for a 1.70-to-1 ratio on the downside. On the Nasdaq, 1,511 issues fell and 1,074 advanced for a 1.41-to-1 ratio favoring decliners.

The S&P 500 index showed seven new 52-week highs and seven new lows while the Nasdaq recorded 97 new highs and 16 new lows.

(Reporting by Tanya Agrawal; Editing by Savio D'Souza)