NEW YORK ( TheStreet) -- Retail sales fell again in June, reigniting fears of a stumble in the consumer rebound. Sales dropped 0.5%, more than the 0.2% decline economists expected. This is the second consecutive monthly dip in sales, following seven straight months of gains. As a result, retail stocks are in the red Wednesday morning, with the S&P Retail Index down 1% to 400.10. Some of the notable losers include, Target ( TGT), which is off 1.4% to $49.22, Dillard's ( DDS), which is decling 2% to $21.98, Buckle ( BKE), which is falling 1.5% to $28 and J.Crew ( JCG), which is losing 2% to $35.66. Excluding the 2.3% plunge in autos, however, retail sales only slipped 0.1%. Sales at the gas pump dropped 2%, furniture sales were off 1.1% and building materials dropped 1%. Hobbies, books and sports stores also saw a decline, as did food and beverage stores. There were some bright spots: electronic and appliance stores reported a 1.3% jump; general merchandisers, which include Wal-Mart ( WMT), grew 0.2%; and department stores rose 1.1%. Restaurants, clothing stores, health and personal care stores, and online and catalog outlets, also saw modest increases. The disappointing overall number shouldn't come as a surprise. Last week retail chain stores reported lackluster June same-store sales, with 14 of the 26 companies tracked by TheStreet missing expectations. Now investors are awaiting the all-important back-to-school selling season, which office supply retailer Staples ( SPLS) said kicks off today. Staples will be ringing the opening bell at the New York Stock Exchange to commemorate the start of the season. But for whom will the bell toll? That depends on whether parents open their wallets this back-to-school season, or stick to their recent, frugal ways.
"In the end, the data is supportive that the consumer has taken a pause to reassess their personal finances as the June 2010 results are being matched to soft year earlier numbers," Wall Street Strategies analyst Brian Sozzi wrote in a note. "Unfortunately, as we learned with the June same-store sales results last week, promotions are still needed to entice the consumer." Retailers like American Eagle Outfitters ( AEO) and Abercrombie & Fitch ( ANF) may be in a pickle, having bought into a consumer recovery and increased inventory levels. "In the world of retail, product lead times could be detrimental to margins, and our sense is that will be the case for the third quarter," Sozzi said. -- Reported by Jeanine Poggi in New York. Follow TheStreet.com on Twitter and become a fan on Facebook.