Those rebate checks are drying up, and the short-term boost retail exchange traded funds (ETFs) saw in the last month could be nearing its end as retailers report mixed results.

The overall outlook for the back-to-school season looks less cheery than it did a few weeks ago, as retailers are once again showing that consumers are shifting back into buying necessities. Jobless claims are at six-year highs, food and gas prices are still up there and the stimulus checks have largely been spent, reports Anne D’Inocenzio for the Associated Press.

That’s cutting into shopping for things such as new clothes and other discretionary items.

Two of the world’s largest discount retailers, Wal-Mart (WMT) and Costco (COST), posted solid gains. They have been throughout most of the economic turmoil, and it’s seen as more evidence that consumers are looking for bargains when it comes to even the most basic of household items.

Even so, Wal-Mart’s results fell short of forecasts, and projected that sales would slow in August.

Mall-based apparel stores such as Limited Brands (LTD) and Gap (GPS) noted even bigger declines. Gap’s same-store sales were off by 11%.

Among the ETFs that could feel the pinch as consumers tighten the reins include:

  • SPDR S&P Retail (XRT): down 6.9% year-to-date; Limited is 2.1%
  • Retail HOLDRs (RTH): down 1.7% year-to-date; Wal-Mart is 21.5%; Costco is 5.9%
  • PowerShares Dynamic Retail (PMR): down 0.5% year-to-date; Gap is 4.2%

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.