Wall Street lower after data, Dudley comments

US stocks were lower in early trading on Monday after data showed a better-than-expected increase in consumer spending in August, adding to the case for an interest rate increase this year.

New York Federal Reserve President William Dudley added to the expectations of an early rate increase, suggesting the central bank could pull the trigger as soon as in October.

Federal Reserve Chair Janet Yellen has said she expects rates to be raised this year.

All three major US indexes were down about 1% in early trading on Monday, with weakness in healthcare stocks and metal prices also weighing on the market.

Healthcare stocks have weakened since Democratic presidential candidate Hillary Clinton criticized drug pricing last week.

The data showing a brisk 0.4 rise consumer spending in August followed stronger-than-expected second-quarter GDP data last week.

This week will culminate with September non-farm payrolls data on Friday. Continued improvement in U.S. employment conditions could help convince the Fed to raise rates for the first time since 2006.

Several other Federal Reserve officials are scheduled to speak during the week, including Yellen on Wednesday.

"Investors are going to be looking at everything. They're going to be looking at every economic number to try and figure out what the Fed is going to do," Rick Fier, director of trading at Conifer Securities in New York said.

Nine of the 10 major S&P sectors were lower. The health index's 1.59% fall led the decliners, weighed by a 2.1% fall in Gilead Sciences.

The materials sector was down 1.67% as copper and aluminum prices slid to one-month lows amid worries about demand from China.

At 9:58 a.m. ET (1358 GMT), the Dow Jones industrial average was down 147.05 points, or 0.9%, at 16,167.62, the S&P 500 was down 20.15 points, or 1.04%, at 1,911.19 and the Nasdaq composite index was down 59.82 points, or 1.28%, at 4,626.67.

"What we have here is a jittery market, and with two days left to the quarter I don't see much of a change in direction," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

"I think the markets will continue to hold the low end of the trading range."

The CBOE Volatility index, known as Wall Street's "fear gauge", jumped 8% to 25.55, firmly above its long-term average of 20.

The S&P 500 and Nasdaq closed lower on Friday, wiping out gains from a rally driven by Yellen's comments about a rate hike, as a selloff in biotechs offset gains in banking shares. The Dow ended higher.

Alcoa's shares were up 2.7% at $9.32 after the aluminum producer said it would split into two publicly traded companies.

Apple fell 1.8% to $112.63 despite reporting that it sold a record number of its new iPhones in the first weekend on the market.

Media General soared 23.19% to $13.73 after Nexstar offered to buy the company in a deal valued at $4.1 billion. Nexstar was up 5% at $46.76.

Declining issues outnumbered advancing ones on the NYSE by 2,348 to 453. On the Nasdaq, 2,065 issues fell and 389 advanced.

The S&P 500 index showed no new 52-week highs and 42 new lows, while the Nasdaq recorded four new highs and 179 new lows.