THE WEEK AHEAD: Interest rate angst

Not much can be said about Wall Street's collapse this week. Rising wages and a slowing Gross Domestic Product again raised the possibility of an interest-rate hike when the Fed meets in late August.

But before investors start selling again, it's important to realize that one of the main reasons the GDP slowed last month was because of inventories. Not an abundance of goods on hand, mind you, but a lack of merchandise. The stuff is literally flying off the shelves.

As for the rising wages, that's going to happen when you have unemployment at its lowest level in more than 30 years. Sure, the cost of goods is destined to increase, but you also have a lot more people making a lot more money to buy those goods.

Still, the market's always looking for a reason to sell, especially in the slow summer months. Now, it's going to be a series of dips and recoveries through the rest of the summer.

For the week, the Dow plunged a staggering 555 points to close at 10,655.15. The Nasdaq chopped off 226 points to end at 2,638.49.

Two important points to remember: Those declines come after both indices hit their all-time highs last Friday. Second, the volume has been ridiculously light this week.

Looking ahead to next week, there's a handful of earnings reports yet to hit the wire. Also, the unemployment figures are due out Friday.

1-800-Flowers.com Inc. will make a big splash on the IPO market the next week because it has big backers, a premier underwriter and hefty sales, but investors may want to note that the company is a lot more 1-800 than .com.

For the nine months ending March 28, the company reported sales of $203.6 million. That's impressive, but the company garnered $30.2 million (15 percent) of that total from online sales. Online sales were up 85 percent from the same period a year ago, but the bulk of the company's revenue, or $146.2 million (72 percent), came via telephone lines. The remainder of the total sales derived from retail sales from 87 franchise shops. For the nine months ending March 28, 1-800-Flowers.com had a net loss of $8.6 million.

The offering, however, should make a nice debut. For starters, Goldman Sachs is the lead underwriter. 1-800-Flowers.com also has a strong brand and that magical .com suffix, which can usually boost an initial public offering at least a little.

The company, based in Westbury, N.Y., is offering 6 million shares with an expected price range of $16 to $18 and a proposed ticker of "FLWS."

1-800-Flowers.com's goal is clear -- use its Web site to expand into selling other goods. In fact the corporate motto is "flowers are just the beginning..." Although the motto may make some investors gag, the company is making headway by offering gift baskets, gourmet foods, garden accessories, and casual lifestyle furnishings in addition to its standard fare of flowers.

"1-800-Flowers will be more able to become a Internet leader because its primarily a catalog company and can parlay that onto the Web," said Tom Taulli, an IPO analyst with Edgar Online.

1-800-Flowers.com is also a Web veteran. The company's site has been up and running since 1995 and the company has forged distribution pacts with America Online Inc., Excite@Home, and the Microsoft Network. Those pacts cost 1-800-Flowers.com $4.3 million for the nine months ending March 28.

The company recently raised $101.6 million in a private placement from Softbank Corp., which owns a major stake in Ziff Davis, and Benchmark Capital. Those funds in addition to the estimated $100 million in proceeds from the IPO will be used to market 1-800-Flowers.com and upgrade systems to become a leading e-commerce destination, the company said in regulatory filings.

1-800-Flowers.com has been profitable in the past, but sees losses for the forseeable future as it pursues its Web strategy.

"At the end of the day though, they have a real business," said Taulli.

Larry Dignan contributed to this report.