Glum economic news sent the markets and exchange traded funds (ETFs) lower in trading, especially in the retail sector.

It’s the time of year for back-to-school shopping, but retailers’ numbers seemed to show that many kids might be using last year’s Pee-Chee folders and wearing out-of-style shoes (quelle horreur). Despite fuel prices falling off their highs, many Americans still seem to be quaking in their boots about the economy.

Wal-Mart (WMT) surpassed expectations and posted higher sales in August, thanks to discounts and shoppers buying necessities, reports Anne D’Innocenzio for the Associated Press. Many mall-based stores as well as high-end retailers posted weaker numbers.

The International Council of Shopping Centers-UBS sales tally rose 1.7% in August, below the 2% forecast. Excluding Wal-Mart, results were unchanged from a year ago.

Jobless claims rose unexpectedly, as well, reports Christopher S. Rugaber for the Associated Press. The 15,000 jump was unexpected, and reversed three weeks of declines.

Gas supplies fell less than expected last week, adding fuel to the thinking that high prices are continuing to curb demand and still have not fallen enough. Oil prices dropped to $107.04 a barrel. The Energy Department’s report said gas stocks fell by 1 million barrels, less than the 1.8 million-barrel drop analysts expected, says Stevenson Jacobs for the Associated Press.

The national average for a gallon of gas is $3.678.

Affected ETFs include:

• United States Gasoline (UGA), up 6.6% since Feb. 28 inception
• PowerShares DB Oil (DBO), up 22.7% year-to-date
• Retail HOLDRs (RTH), up 5.9% year-to-date
• iShares Dow Jones U.S. Consumer Services Sector (IYC), down 3.8% year-to-date

Tags: DBO, Energy, Gas, IYC, Oil, Retail & Consumer, RTH, UGA

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