American shoppers went into hiding in September, sticking to buying the bare-bone essentials and leading many retailers to report dismal...

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NEW YORK — American shoppers went into hiding in September, sticking to buying the bare-bone essentials and leading many retailers to report dismal sales for the month as skittish consumers grappled with the financial meltdown spreading around the globe.

The weak reports on Wednesday — an alarming gauge of consumer behavior since the meltdown began midway through last month — are fueling more worries about the holiday season and the overall economy, since consumer spending accounts for two-thirds of all economic activity.

Given the sharp falloff in sales and customer traffic, many retailers, including J.C. Penney Co., Kohl’s Corp., Saks Inc. and Nordstrom Inc. cut their outlooks as they use aggressive discounts to pull in shell-shocked shoppers.

Nordstrom said Wednesday its same-store sales for the five weeks ended Oct. 4 were down 9.6 percent from the previous year, while overall sales were down 5.8 percent.

“In September we experienced a weakening sales trend that was greater than our earlier expectations,” company president Blake Nordstrom, said in a statement. The company now pegs third-quarter same-store sales to decrease 9 to 11 percent, and forecasts quarterly earnings of $0.32 to $0.37, below its prior outlook of $0.49 to $0.54.

“Discretionary spending has come to a trickle,” said Ken Perkins, president of research company RetailMetrics LLC. “Consumers are the most worried I have seen since at least the 1991 recession. There are so many factors laying on their psyche.”

He added that even discounters are going to have a “tough go” this holiday season. Indeed, September results showed discounters weren’t immune to shoppers’ mounting worries about their financial security.

Wal-Mart Stores Inc., the world’s largest retailer, and wholesale club operator Costco Wholesale Corp. both reported solid sales but results were a bit shy of Wall Street estimates. Target Corp. reported a bigger-than-expected drop and said it expects problems with its credit card business to last through the rest of the year as customers have trouble making payments.

Luxury stores such as Neiman Marcus Group Inc. and Saks Inc., which had seen a sales slowdown, suffered sharp drops as well-heeled shoppers cut back on $600 stilettos and other luxuries. Many mall-based apparel stores and department stores including J.C. Penney Co. and American Eagle Outfitters Inc. found themselves mired in a deep sales slump.

According to the International Council of Shopping Centers’ preliminary tally, September sales rose 1.7 percent, well below the modest 2.3 percent average growth since the beginning of the retail industry’s fiscal year in February. The tally is based on same-store sales or sales at stores opened at least a year. The final tally will be available Thursday to reflect results still to come from retailers such as Gap Inc. and TJX Cos. Inc. Many retailers reported their figures a day earlier than usual because of the Yom Kippur holiday.

Analysts are worried that spending could deteriorate even more as the problems on Wall Street further filter through the economy, with layoffs expected to rise in the coming months and the credit markets remaining frozen. That means that consumers are having a hard time getting loans and credit lines. That’s adding to more stress for shoppers, who were already contending with high gas and food prices and a slumping home market.

And even with a massive government bailout package, the stock market has kept dropping — signaling fears among investors that the rescue plan will not prove to be a panacea. In the last five trading days, the Dow Jones Industrials lost 1,400 points, wreaking havoc on Americans’ retirement funds.

On Thursday, The Federal Reserve ordered an emergency interest rate cut of a half percentage point to cope with the worst financial crisis since the 1929 stock market crash. The Dow fell another 200 points on Wednesday, and all the major indexes were down sharply.

Wal-Mart offered a tepid sales outlook as it reported a 2.4 percent gain in same-store sales. Analysts had expected a 2.5 percent gain. The company said the impact from hurricanes Ike, Gustav and Hanna, which forced the company to temporarily close 341 stores, depressed same-store sales by 0.4 percentage point.

Wal-Mart said it expects same-store sales at its U.S. stores to be up from 1 to 2 percent for October.

Like many U.S. retailers that operate overseas, Wal-Mart is now also contending with an international economic slowdown. The retailer said it had solid sales figures in many of its international markets, despite tough economic conditions. It noted a 3.8 percent gain in nominal same-store sales at Wal-Mart Mexico despite a slowdown in the Mexican economy.

The company said it’s sticking with its current earnings estimate for the quarter ending Oct. 31.

Rival Target Corp., which has struggled because of its heavy emphasis on nonessentials like fashions and home furnishings, reported a 3 percent drop in same-store sales. That’s worse than analysts had expected. It also reduced its third-quarter estimates as mounting defaults on payments for its store credit card has led to higher write-offs.

Costco announced a 7 percent gain in same-store sales, just below the 7.5 percent estimate. Excluding gasoline price inflation, same-store sales would have been up 6 percent.

But mall-based apparel and department stores continued to see their fortunes unravel. Luxury stores were hit hard by the financial meltdown, which is expected to result in mounting layoffs in financial jobs.