Shares of big-format discount retailers declined on Wednesday after Costco Wholesale Corp. forecast earnings below Wall Street expectations.

Costco Wholesale Corp <COST.O> warned on Wednesday that its quarterly profit would miss current Wall Street targets because of soaring energy costs and other inflationary pressures, sending shares of the No. 1 U.S. warehouse club operator down as much as 13.5 percent.

By Nicole Maestri

Costco Wholesale, the No. 1 U.S. warehouse club operator, warned on Wednesday that quarterly profit would miss current Wall Street targets because of soaring energy costs and other inflationary pressures, sending its shares down more than 8 percent.

Shares of broadline retailers fell Friday, as the broader market slid amid investor concern about the rising price of oil and mortgage lenders Fannie and Freddie Mac.

Discount stores remain a bright spot in the market as concerns linger over the health of consumer spending, according to one analyst.

Costco Wholesale Corp <COST.O> and BJ's Wholesale Club Inc <BJ.N> on Thursday reported strong June sales as gas prices and food sales boosted results at the warehouse club operators.

Retailers, including Wal-Mart Stores, are posting solid same-store sales growth in June, as expected, as seasonal weather and tax rebate checks helped get consumers to the store.

U.S. retailers, led by the discounters, are expected to post slightly better June same- store sales this week, thanks to seasonal weather and rebate checks that have made their way to cash registers, mostly for basic items such as gasoline and food.

Costco Wholesale, the biggest U.S. warehouse club operator, said Thursday its quarterly profit jumped 32 percent, beating expectations, as shoppers flocked to its stores for discounts on food and gasoline.

Stocks plunged after the Federal Reserve cut its 2008 outlook and oil finished above $133 a barrel.  The Dow shed more than 227 points, or 1.8 percent, bringing its two-day point decline to about 450.

If energy and food prices continue to surge, consumers aren't going to be able to keep up, which would have a huge impact on the economy -- and stocks.  Still,  the market doesn't seem worried.

Many US retailers posted better-than-expected sales in April. However, with most consumers sticking to bargains or basics, don't expect an extended rebound in retail.

Many US retailers posted better-than-expected sales in April. However, with most consumers sticking to bargains or basics, don't expect an extended rebound in retail.

Wall Street was poised to open mostly lower on Thursday, despite positive retail sales numbers as the market continued to worry over the battered financial sector.