Retailer Macy's posted a better-than-expected quarterly profit on Tuesday despite a drop in sales, sending its shares up 3 percent.

A sluggish stock market suffered only limited losses despite results from critical economic reports that showed surging producer prices and declining consumer confidence.

U.S. retailer Macy's said Wednesday that sales at its stores open at least one full fiscal year fell 7.1 percent in January, and announced restructuring plans to cut costs.

Discounts and gift cards helped many U.S. retailers rebound in January from a dreary December, according to data released Wednesday, but analysts suspected post-holiday sales were stunted by the weaker economy.

Vacancy rates at U.S. regional malls rose and rents fell during the fourth quarter due to concerns about consumer spending and a potential slowdown in the national economy, real estate research firm Reis said.

Macy's reported a 7.9 percent fall in December sales at stores open at least one full fiscal year, worse than the company and analysts expected, hurt by a calendar shift and cautious consumer spending.

Big box retailers like Wal-Mart and Costco saw sales that exceeded expectations, but most niche retailers  saw their sales drop or saw sales grow less than expected.