As retail buyers buzzed around New York from show to show, their colleagues on the financial side zeroed in on Wall Street, where even a glimmer of an interest rate hike tanked the market.
At midday, the Dow Jones Industrial Average was down 238.66 points, or 1.3 percent, to 18,241.25. Among the fashion and retail-related decliners were Kate Spade & Co., down 3.3 percent to $18.43; Alibaba Group Holding Ltd., 2.7 percent to $99.80; G-III Apparel Group, 2.2 percent to $30.42; Wal-Mart Stores Inc., 2 percent to $70.43; Guess Inc., 2 percent to $15.11; Ascena Retail Group Inc., 2.3 percent to $7.74, and Amazon.com Inc., 1.9 percent to $769.18.
Traders were spooked in part by a speech by Eric Rosengren, the head of the Federal Reserve Bank of Boston, in which he said a case could be made for higher interest rates.
“My personal view, based on data that we have received to date, is that a reasonable case can be made for continuing to pursue a gradual normalization of monetary policy,” he said.
Higher interest rates would make it more expensive to borrow money and slow stock market growth, but they would also be a sign positive economic sign, signaling that growth was strengthening.
Last week, the government said August payrolls rose by 126,000, a performance that was below the 180,000 projected by economists and deemed weak enough to take a rate hike out of the picture in the immediate future.