NEW YORK (CNN/Money) - Wal-Mart Stores Inc.'s July sales are tracking within the company's expectations, the world's biggest retailer said Monday, but Federated Department Stores and J.C. Penney expect declines.

The chains released their most recent sales results Monday in weekly pre-recorded announcements as economists and investors keep a wary eye out for slower consumer spending amid stagnant corporate spending and a slack economy.

Shares of all three companies headed lower in midday trading Monday following the sales expectations because of Wall Street jitters and a weakening dollar that hurt the broader market.

The entire Standard & Poor's Retail Index was down about 3.5 percent in trading Monday.

Some are concerned that consumers, whose spending accounts for two-thirds of the economy, could begin to pull back if the economy does not show a solid improvement in the near future. So far, Americans have held firm, though they continue to favor large discount chains such as Wal-Mart over department stores.

And retailers could face a difficult time in the important fall selling season if the market does not improve, said Robert Buchanan, a retail analyst at A.G. Edwards.

"I think the group right now is suspect primarily because of the stock market and the implication the stock market has for consumer psychology," Buchanan said.

Investors could punish the stock of such companies as Wal-Mart, which is trading at about 30 times earnings, and Kohl's, at 38 times earnings, if consumers begin tightening their wallets in the absence of any definitive economic upswing, Buchanan said.

The continuation of that trend showed up clearly last week when the nation's merchants individually reported sales for the month of June.

Dow component Wal-Mart said Monday it expects July sales at stores open at least a year, a key gauge known as same-store sales, to increase 5 to 7 percent at its Wal-Mart stores division. The company expects a 3 to 4 percent increase at its Sam's Club wholesale operation.

The Bentonville, Ark.-based chain said sales of basic household items, food, electronics, and girls and women's clothing were the best performers during the first two weeks of July, while sales of summer seasonal items were off during the weeks leading up to the July 4th holiday. The company said flooding in southern Texas helped dampen seasonal sales.

Baby products, toys and pharmacy items led sales at Sam's Club. In the international division, Mexico, Canada and the United Kingdom have turned in the strongest results so far in July.

Still, Wal-Mart's stock was down about 3 percent in midday trading despite the company's sales expectations.

However, department stores continue to struggle with Cincinnati-based Federated, owner of Macy's and Bloomingdale's, saying it expects same-store sales to be flat to slightly down for the month.

And J.C. Penney, the Plano, Texas-based retailer, which has been under a restructuring effort, anticipates department store sales are on pace for an expected 2 to 4 percent decline for the month. Penney said jewelry, home furnishings and women's accessories have been the best-performing categories.

The company expects a 6 to 8 percent same-store sales increase for its Eckerd drugstore division, and said sales remain on track. Catalog sales are expected to fall 20 percent in July.

Penney's and Federated's shares were each down more than 3 percent in midday trading Monday.