Stocks turn lower

NEW YORK (CNNMoney.com) -- Stocks turned lower late Monday morning, led by the Nasdaq, as investors welcomed Intel's improved profit outlook, but shunned other technology stocks, extending the previous session's brutal selloff.

The Dow Jones industrial average (down 32.03 to 13,081.35, Charts) lost around 0.2 percent 90 minutes into the session, while the broader S&P 500 (down 8.61 to 1,444.94, Charts) index fell 0.5 percent. The tech-fueled Nasdaq Composite (down 15.73 to 2,549.97, Charts) fell 0.6 percent.

Stocks had started on a positive note Monday, thanks in part to Intel, but the early advance was unsustainable as investors continued to worry about the broad economy.

The Dow fell 250 points on Friday after a surprise drop in August payrolls raised worries that the problems in the housing and financial markets are spreading to the rest of the economy.

The weak report raised bets that the Federal Reserve will need to cut a key short-term interest rate when it holds its policy meeting next week. Ahead of that, a number of Fed officials are speaking.

Atlanta Fed president Dennis Lockhart said that the central bank has to take any information on the labor market seriously, but that last Friday's report is backward-looking and should be viewed alongside recent signs of solid retail sales and still-strong consumer spending. Lockhart is not a voting member of the Fed's policy committee.

Three more Fed officials are speaking Monday, including Fed Governor Frederic Mishkin.

Chipmaker Intel (up $0.21 to $25.68, Charts, Fortune 500) said third-quarter revenue should top estimates, thanks to strong worldwide demand for its products. Shares rose modestly.

However, Intel was a notable standout to the upside, with decliners quickly overshadowing advancers.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by more than two to one on volume of 320 million shares. On the Nasdaq, losers topped winners by almost three to one on volume of 520 million shares.

Other big tech issues fell, including Dell (down $0.91 to $26.25, Charts, Fortune 500), Yahoo (down $0.54 to $23.22, Charts, Fortune 500) and eBay (down $0.84 to $34.41, Charts, Fortune 500).

Dow component Alcoa (down $0.87 to $34.00, Charts, Fortune 500) continued to erode, falling for a second session.

A number of financial stocks fell, as investors continued to worry about the tightening of credit and the impact from the subprime mortgage mess.

Countrywide Financial (down $1.16 to $17.05, Charts, Fortune 500), the poster child for the subprime mortgage fallout, said late Friday that it will cut between 10,000 and 12,000 jobs, or 20 percent of its work force, over the next three months. Shares slipped Monday morning

Treasurys rose, adding on to Friday's big rally on continued bets that the Fed will need to cut interest rates when it meets next week. The advance lowered the yield on the 10-year note to 4.37 percent from 4.38 percent late Friday. Bond prices and yields move in opposite directions.

In currency trading, the dollar fell versus the euro and rose versus the yen.

U.S. light crude oil for October delivery fell 97 cents to $75.73 a barrel on the New York Mercantile Exchange.

COMEX gold for December delivery rose $2.90 to $712.60 an ounce.