By William Spain

Retail stocks headed lower early Thursday, as the sector's main indicator slipped in the wake of mixed but mostly down May sales results.

The S&P Retail Index (RLX) declined about 2% to 332.36

In some cases, improved consumer confidence, along with a slowing rate of decline in retailers' spending and various positive economic indicators, seemed to help offset the absence of last year's rebate checks, a soaring unemployment rate and an uptick in fuel prices.

Among the retailers reporting positive same-store-sales results early Thursday were Buckle (BKE), which gained 13.4% in the key metric, and Walgreen (WAG), which posted a 1% increase. Shares of Buckle were down almost 5% while Walgreen slipped more than 1%.

On the downside, Children's Place (PLCE) reported a 9% drop in same-store sales as opposed to Wall Street's view of a 0.1% decline; Wet Seal (WTSLA) sales dropped 8.4%. Shares of Children's Place fell more than 7%, and Wet Seal gained 4%.

Meanwhile, Costco Wholesale (COST) said that same-store sales fell 7%, while total sales fell 5% to $5.47 billion. That compares to the analyst view of a same-store-sales drop of 6.4%.

Shares of Costco fell about 4%.

Overall, retailers' May same-store sales - those at outlets open at least a year - were expected to decline 4.1% on average, compared with an average drop of 4.5% so far this year, according to Thomson Reuters' survey of 30 retailers. That compares with a 1.1% increase in the year-earlier month.

Every category save one - drugstores - was expected to post same-store-sales declines.

Craig Johnson, president of Customer Growth Partners, a consultancy, cautioned that investors shouldn't read too much into the results, as they represent less than 10% of the total retail sector.

Still, he noted, "from the results we have seen out of discounters, consumers are focusing on absolute necessities. They are buying much closer to need and making more trips with smaller baskets."

By way of illustration, Target (TGT) said May same-store sales fell 6.1%, while analysts had expected the Minneapolis retailer's same-store sales to fall 4.3%. And total sales for the month of May were below expectations, the company said

Target shares slid 2.6%.

These are "all signs of a highly stressed consumer," Johnson said. "And the department-store sector is exceptionally stressed."

Certainly Macy's (M) is: The chain said its May same-store sales fell 9.1%, slightly better than analysts' expectation for a 9.3% decline. Macy's also reported total sales of $1.74 billion for the four weeks ended May 30, a decrease of 9.5%.

Macy's shares fell 5%.

The significance of monthly combined results has waned after retail giant Wal-Mart Stores Inc. (WMT), which had represented a weighting of about 51% in the Thomson index, said last month that it will stop reporting monthly sales.

Instead of reporting May numbers, Wal-Mart said Thursday that it will create more than 22,000 jobs in the U.S. in a variety of management and line positions as it expands stores and opens new ones. The jobs the company said it would seek to fill include store managers, human-resources managers, pharmacists, cashiers and customer-service and sales staff.

Shares of Wal-Mart were off less than 1%.

-William Spain; 415-439-6400; AskNewswires@dowjones.com