Wal-Mart (WMT) fell 4% in pre-market trading Thursday after the retail giant became the latest U.S. company to post weak January sales. Wal-Mart said sales in established stores rose just 0.5% from a year ago last month, a fraction of the expected gain. “Unfavorable weather negatively affected overall general merchandise sales, especially in the Midwest,” Wal-Mart said. “Gift card redemptions were below expectations, and customers appear to be holding gift cards longer and using them more often for food and consumables rather than discretionary purchases.” That’s a bad sign but in line with comments from Macy’s (M), which on Wednesday posted a 7.1% drop in January sales, and Nordstrom (JWN), which early Thursday posted a 6.6% comparable-store sales decline. Even Costco (COST), which posted a 7% same-store sales gain Thursday, said its 5% rise in U.S. stores was fueled in large part by the sharp rise of gasoline prices. Without bigger prices at the pump, Costco’s rise would have been just 3%. Hard times are here for many consumers - and for retailers.

What’s in the American consumer’s wallet? Not much, judging by poor numbers released Thursday by credit card lender Capital One (COF) and retailers led by Macy’s (M). Capital One shares dropped to a new low in morning trading after the company warned in a midnight press release that its 2007 earnings will fall 20 percent short of the bank’s previous forecast. The announcement prompted the company to counsel Wall Street that it “remains well-positioned with respect to funding as a result of its more robust access to deposits, reduced reliance on wholesale funding markets, and strategy of holding significant liquidity.” That is, Capital One doesn’t have to expect to raise money in the markets this year, which is a good thing considering investors’ aversion to lending money to all but the safest borrowers. Meanwhile, Macy’s said sales in established stores dropped almost 8 percent last month, prompting CEO Terry Lundgren to muse that “macroeconomic trends led customers to spend cautiously for the holiday.” And beyond: Macy’s expects to see January same-store sales drop about 5 percent from a year ago. The retrenchment is on.

This just in from Fortune’s Suzanne Kapner:

Macy’s (M) delivered an inauspicious holiday gift to 900 employees this afternoon, when the huge department store retailer disclosed plans to close nine stores.
 
Like other department store retailers, Macy’s has suffered from lackluster sales this holiday season. To try to spur last minute holiday shopping, the company took the unusual step of keeping eight stores in the metro New York area open round the clock in the days leading up to Christmas.
 
But, in fact, Macy’s troubles date back further, to the 2005 acquisition of the May Department Stores. In the wake of that deal Macy’s, formerly known as Federated Department Stores, closed dozens of overlapping stores.
 
Given the company’s middling performance this year, analysts had suspected that further store closings were in the works. In an interview earlier this month, Macy’s Chief Executive Terry Lundgren told Fortune: “We always go through the normal process of pruning our real estate portfolio, but there are no plans for a wide-scale closure of stores.”
 
Despite Macy’s troubles, the company continues to open stores in areas it considers more promising. Macy’s opened 10 new department stores in 2007 and one furniture gallery. Some five stores are expected to open in 2008 and six to eight new locations are on the table for 2009.
 
The stores slated for closure, in Ohio, Texas, Louisiana, Indiana and Utah, are located in regions that have been some of the weakest for Macy’s. The company said it would try to relocate displaced employees to nearby stores when possible - cold comfort for the remaining Macy’s workers who will start the New Year jobless.
 

The holiday sales season isn’t making many retailers happy. U.S. retail sales dropped for a third straight week, Bloomberg reported, as bad weather apparently kept shoppers home and added to the ranks of procrastinators. The trends point to more pain for big retailers like Target (TGT) and Macy’s (M), which have been struggling to boost sales as consumers pull back. Fortune’s Suzanne Kapner recently reported that in addition to the widely discussed economic pain tied to the bad housing markets, shoppers are also being discouraged by big stores’ lack of must-have fashion merchandise. With the holiday season accounting for the lion’s share of many chains’ profits, Wall Street is crossing its fingers that the final weekend before Christmas will be a blockbuster.

This just in from Fortune’s Suzanne Kapner:

The market cheered better-than-expected November retail sales, released Thursday morning by the U.S. Commerce Department, suggesting that the Grinch might not steal this holiday shopping season after all. Excluding automobiles, gas and restaurants, sales rose 5.1 percent unadjusted compared with the same period last year and 1.2 percent seasonally adjusted from October. Economists had been expecting a 0.6 percent seasonally adjusted increase compared with October.

However, many retailers attributed their strong November sales gains to a calendar shift that added an extra week to this year versus last year. As a result, retailers, who reported individual monthly sales results last Thursday, tempered their strong November gains by lowering expectations for December. Perhaps Terry Lundgren, the chief executive of Macy’s (MZ), said it best: “It is important that the November-December holiday selling period be viewed together rather than each month individually.”