Wal-Mart Stores Inc. (WMT) lowered its August sales forecast Monday because of disappointing back-to-school demand, casting doubt on the strength of U.S. consumer spending in a key shopping season.

Wal-Mart, the world's biggest retailer and a bellwether of the U.S. economy, now expects August sales at U.S. stores open at least a year to be flat to up 2 percent. It had previously forecast a 2 percent to 4 percent increase.

Shares of Wal-Mart fell 2.4 percent on the New York Stock Exchange (search) early Monday, weighing on the Dow Jones industrial average (search).

The back-to-school shopping season, which peaks in August, is the second-biggest retail sales period behind the Thanksgiving-to-Christmas holiday season.

Analysts and retailers have cautioned that soaring gasoline prices and tough comparisons against last year's tax-credit-inflated performance would likely hurt August sales across the retail sector.

"The low-income customer is badly affected by the robbery at the gas pump," said Kurt Barnard, head of consulting firm Retail Forecasting Group. "If you have an income of $50,000 or $70,000 a year, another dime in the price of gas isn't going to kill you, but if you're at $35,000 it can bankrupt you."

The International Council of Shopping Centers (search) has predicted a 3 percent increase in August sales at stores open at least a year -- or same-store sales. However, that forecast was given before Wal-Mart lowered its August sales view.

Analysts will be waiting for a weekly update from Target Corp. (TGT) after the stock market closes Monday for further indication of back-to-school demand.

Last week, J.C. Penney Co. (JCP) said its early back-to-school sales have been better than expected, although it cautioned that energy prices and terrorism worries could sap consumer spending. Analysts widely expect J.C. Penney to be among the few winners for back-to-school thanks to a well-received assortment of pre-teen and teen fashions.

In 2003, many retailers posted strong August sales, fattened by child tax credits. The tax boost makes it even more difficult for chain stores to top last year's performance.

"Last year they took away business from this year. Make no mistake about that," Barnard said.

Wal-Mart said last year's child tax credits helped drive a strong 6.9 percent in its same-store sales increase for August, a level that will be hard to beat.

On a recorded message detailing sales through Aug. 20, Bentonville, Ark-based Wal-Mart said back-to-school sales fell short of its expectations, although demand remained strong for school uniforms and athletic shoes.

The retailer said it had less clearance merchandise than a year ago, and it cited the timing of Labor Day, which falls in the September sales period this year instead of August.

Wal-Mart said 75 of its stores were closed because of Hurricane Charley. In all, some 200 of its stores were affected by the hurricane that battered Florida.

"Wal-Mart has legitimate explanation for August's weakness but the slower overall activity in back-to-school suggests we have already entered into a period ... when consumer spending on seasonal and discretionary items is slowing substantially," said Richard Hastings, retail analyst with credit advisory firm Bernard Sands.

Wal-Mart said the best-selling categories last week included food, paper goods -- largely because of price inflation -- and pet supplies.