* NY Fed President Dudley says September rate hike possible
* TJX shares sink after results
* Indexes down: Dow 0.3 percent, S&P 0.4 percent, Nasdaq 0.5 percent (Updates to late afternoon)
By Caroline Valetkevitch
Aug 16 (Reuters) - U.S. stocks eased from record highs on Tuesday after New York Federal Reserve Bank President William Dudley said an interest rate hike in September was possible.
Dudley cited recent labor market gains in his comments, which came ahead of an annual meeting of central bankers from around the world in Jackson Hole, Wyoming, next week.
The comments raised traders' expectations of a U.S. rate hike this year, according to the CME Group's FedWatch tool.
"I think there's a chance they will, and Dudley saying there's a chance they will is significant," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut, noting that the stock market has been strong, as well as the jobs numbers.
Continued expectations of low interest rates have helped stocks rise to record highs, with the S&P 500 index notching 10 all-time closing highs so far this year.
At 3:12 p.m. (1912 GMT), the Dow Jones industrial average was down 58.11 points, or 0.31 percent, to 18,577.94, the S&P 500 had lost 8.39 points, or 0.38 percent, to 2,181.76 and the Nasdaq Composite had dropped 24.58 points, or 0.47 percent, to 5,237.44.
The S&P telecommunications index and utilities , which tend to underperform as prospects for higher rates increase, led sector declines.
Investors will pore over the minutes of the Fed's July policy meeting, scheduled for release on Wednesday, for clues on the U.S. central bank's rate plans after recent blowout jobs data.
Shares of TJX were down 5.5 percent at $78.20 after the company forecast fiscal-year earnings below analysts' estimates.
Declining issues outnumbered advancing ones on the NYSE by a 1.95-to-1 ratio; on Nasdaq, a 1.78-to-1 ratio favored decliners.
The S&P 500 posted seven new 52-week highs and no new lows; the Nasdaq Composite recorded 69 new highs and 25 new lows. (Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty and James Dalgleish)