NEW YORK — American shoppers went into hiding in September, sticking to buying the bare-bone essentials and leading many retailers to report dismal sales for the month as skittish consumers grappled with the financial meltdown spreading around the globe.

The weak reports today are fueling more worries about the holiday season and the overall economy, since consumer spending accounts for two-thirds of all economic activity.

Given the sharp falloff in sales and customer traffic, many retailers, including J.C. Penney, Kohl's, Saks and Nordstrom cut their outlooks as they use aggressive discounts to pull in shell-shocked shoppers.

"Discretionary spending has come to a trickle," said Ken Perkins, president of research company RetailMetrics. "Consumers are the most worried I have seen since at least the 1991 recession. There are so many factors laying on their psyche."

He added even discounters are going to have a "tough go" this holiday season. Indeed, September results showed discounters weren't immune to shoppers' mounting worries about their financial security.

Wal-Mart, the world's largest retailer, and wholesale club operator Costco both reported solid sales, but results were a bit shy of Wall Street estimates. Target reported a bigger-than-expected drop and said it expects problems with its credit card business to last through the rest of the year as customers have trouble making payments.