US STOCKS-Wall St lower on NY Fed chief's rate hike comments
* NY Fed President Dudley says Sept rate hike possible
* Dollar index drops 0.74 pct
* CPI index flat in July vs 0.2 pct rise in June
* Indexes down: Dow 0.32 pct, S&P 0.31 pct, Nasdaq 0.33 pct (Updates to open)
By Yashaswini Swamynathan
Aug 16 (Reuters) - Wall Street was sharply lower on Tuesday morning, with indexes pulling away from record levels, after New York Federal Reserve President William Dudley said an interest rate in September was possible.
"The labor market is getting tighter and we're starting to see signs of wage gains starting to accelerate, so I think we're getting closer to that point in time when it will be appropriate to actually raise short-term rates again," Dudley, a permanent voting member of the Federal Reserve, said in an interview on Fox Business Network.
Dudley's comments raised expectations among traders of an interest rate hike this year - they now see a 12 percent chance of a hike in September, up from 9 percent before Dudley's comments.
That measure increased to 37.8 percent from 37.4 percent for December, according to CME Group's FedWatch tool. Continuación...