Target Corp.

Amid ongoing economic woes in Greece and concerns that the Federal Reserve will raise rates this October, stocks slumped Monday with retail stocks in particular taking a hard hit to the chin.

Amid ongoing economic woes in Greece and concerns that the Federal Reserve will raise rates this October, stocks slumped Monday with retail stocks in particular taking a hard hit.

The Dow Jones Industrial Average and the S&P 500 both fell 0.5 percent to 17,766 and 2,082, respectively. The S&P Retailing Industry Group index shed 0.7 percent to close at 1,127. Earlier in the day, the FTSE 100 lost 0.2 percent to close at 6,790 while the Nikkei 225 lost 0.02 percent to close at 20,457.

One of the sharper decliners in the retail sector was Lululemon Athletica Inc., which dropped 3.9 percent to close at $61.32. Investors were placing bets on the company’s quarterly results, which are due tomorrow. Analysts are expecting the firm to deliver between $417 million and $421 million. Although shares fell today, the stock is up about 20 percent so far this year.

Meanwhile, Sears Holdings Corp. lost 4.1 percent to finish at $39.07 after reporting its quarterly results, which failed to inspire investors even as the company narrowed its loss. Shares of Target dropped 0.4 percent to $78.89, performing like many retailers in the sector today by trading on light volume. The mass retailer’s stock is up about 5 percent for the year.

Aside from debt concerns in Greece and its impact on Europe’s economy, investors were still fretting over Friday’s job report that came in better than expected. The concern is that the Fed will raise rates this fall (as opposed to early next year), which will negatively impact business — at least in the short-term. Those immediately hurt include bond holders and consumers with adjustable rate loans. From a broader perspective, higher interest rates could cool job growth and business expansion. Banks will benefit, though, from an increase.

Nariman Behravesh and Sara Johnson, economists from IHS Global Insight, said in a research note  that the “much-stronger-than expected May payroll job increase [280,000] confirms the IHS view that the first-quarter slump in [gross domestic product] growth was a blip.”

As a result, IHS is forecasting the GDP to grow between 2 and 3 percent this year. And regarding April’s flat retail sales report, the economists said that’s a different story. “IHS’s estimate of real consumer spending growth in the second quarter has been revised downward from 3 percent to 2.2 percent,” they said. “Consumers are cautious, using some of their savings at the gasoline pump to pay down debt or increase savings. One bright sign was the surge in light-vehicle sales in May.”