Retail Sector Falls as Gas Prices Hurt Sales

Gas prices -- damn you, gas prices! -- are wreaking havoc once again. As the cost rose at the pump last week, U.S. shoppers continued to cut back on their shopping, and the retail sector suffered in response.

Sales for the second week in June dropped .6%, according to the International Council of Shopping Centers and Goldman Sachs. On a year-over-year basis, sales sank 1.5%.

ICSC expects monthly June sales to tumble about 5%, compared with a 4.6% decline in May.

Shares of retailers continued to sink on Tuesday on the disappointing numbers, with the S&P Retail Index down 2.4% to 319.68 in afternoon trading.

Notable decliners include Target(TGT Quote), which fell 4% to $38.64, while rival Wal-Mart Stores(WMT Quote)slipped 1% to $48.16.

On Monday, the big-box discounter was downgraded by a Goldman Sachs analyst, who said Wal-Mart will be unable to sustain its recent rates of improvement.

One of the biggest decliners was Best Buy(BBY Quote), which crashed 7% to $36.10 after reporting disappointing quarterly same-store sales numbers.

The department store sector continued to be weighed down, as Macy's(M Quote) fell 6% to $11.24, Sears(SHLD Quote) dropped by 4% to $64.41, Kohl's(KSS Quote) declined 3% to $44.10, and J.C. Penney(JCP Quote) tanked 6% to $26.53. High-end retailer Saks(SKS Quote) also fell 6.5% to $4.05, while competitor Nordstrom(JWN Quote) stumbled by 5.5% to $19.26 in afternoon trading.

In specialty retail, Gap(GPS Quote) fell 3% to $15.63, Limited Brands(LTD Quote) was off 4.5% to $11.95 and J.Crew(JCG Quote) declined 5% to $23.80.

There were a few gainers. Women's apparel retail Talbots(TLB Quote) rose 5% to $5.44, while department stores Stein Mart(SMRT Quote) jumped 4% to $7.76. Drugstore Rite Aid(RAD Quote) was also up by 1.3% to $1.46.