OVERNIGHT

Some might disagree but Macy's which just reported it worse earnings since the recession began could easily be a surrogate for consumers.

As the WSJ reported, Macy’s Inc. set off fresh fears about the health of the U.S. retail sector, after the country’s largest department-store chain reported its worst quarterly sales since the recession.

The company’s poor results and downbeat comments Wednesday triggered a selloff across apparel makers, mall owners, luxury brands and rival chains. Macy’s shares had their biggest drop since 2008.

“We are not counting on the consumer to spend more,” Chief Executive Terry Lundgren said Wednesday. With saving rates high, wages growing and employment data steady, Macy’s executives were at a loss to explain why consumers weren’t spending in its stores. “We’re, frankly, scratching our heads,” said Chief Financial OfficerKaren Hoguet.

Investor are concerned about the outlook for U.S. retailers, i.e., consumers and more weak earnings reports in Japan and that apparently led to Asian shares defined Thursday in early trading. The Nikkei fell 0.4%, the Korean Kospi was off 0.1% and the Australian S&P/ASX 200 dropped 0.5%.

Meanwhile, the Shanghai Composite Index slipped 0.6% while the Hang Send Index eased 0.4%. According to the Journal, The common theme in the pullback all across the Asia-Pacific region was weaker-than-expected earnings by major U.S. companies. Analysts had been hoping for a revival in consumer spending that could lift the broader U.S. economy.

Macy's was not alone. Disney also reported weak earnings as did several Japanese companies including Toyota and Bridgestone the big tire company. In the futures market gold was off $3.30 at $1,272.20 and oil down a fraction at $46.19.