May Sales Scare Off Investors; Retail Falls

Retail shares fell yet again on Thursday, despite stronger May sales data.

The Commerce Department reported on Thursday that May retail sales grew by .5%, boosted by a rebound in auto dealerships and gas stations.

While most sectors saw a slight increase in sales, general merchandise stores, which include department retailers and discounters actually posted a decline. Investors did not react favorably to this small snag, sending shares in both sectors tumbling.

Big-box giant Wal-Mart(WMT Quote) dropped 1.5% to close at $49.32, while rival Target (TGT Quote)fell 2% to $39.55.

Macy's(M Quote) took a substantial hit, sinking 5% to $12. Elsewhere in department stores, J.C. Penney(JCP Quote) slipped 3% to $27.92, Stein Mart(SMRT Quote) dropped 5% to $7.49 and Saks(SKS Quote) fell 3% to $3.76.

The biggest loser of the day, however, was Lululemon Athletica(LULU Quote), which posted a 24% decline in first-quarter earnings. The news sent shares of the yoga-inspired apparel maker plunging 12% to close at $13.34.

Other disappointments were: Urban Outfitters(URBN Quote), which tanked 4% to $21.11, Pacific Sunwear of California(PSUN Quote), which teetered 6% to close at $3.72, and J.Crew(JCG Quote), which fell 4% to $25.41.