WRAPUP 3-Wal-Mart, other U.S. retailers warn after weak Dec

* Wal-Mart Dec same-store sales disappoint; forecast cut

* Limited, J Crew, Macy's, Gap warn on Q4 profits

* Wal-Mart shares down 7.6 percent

* Standard & Poor's retail index down 0.3 pct (Adds share activity)

By Brad Dorfman

CHICAGO, Jan 8 (Reuters) - Wal-Mart Stores Inc (WMT.N) led U.S. retailers in disappointing December same-store sales and profit warnings on Thursday, sparking fresh recession concerns that hit stock and currency markets.

Nearly a dozen retailers, including Macy's (M.N) and Target Corp (TGT.N), told investors that profits would take a further hit in the fourth quarter, which includes key holiday sales.

The U.S. recession, job losses and winter storms right before Christmas contributed to the worst holiday shopping season in up to four decades.

Wal-Mart, the world's largest retailer, said sales at U.S. stores open at least a year rose 1.7 percent, excluding gasoline, worse than Wall Street's expectation of a 2.8 percent increase. It also cut its profit forecast for its fourth quarter, which began on Nov. 1. [ID:nN08350904]

The company's shares fell 7.6 percent, leading a 0.3 percent decline in the Standard & Poor's retail index .RLX.

The Wal-Mart news also tempered wider market appetite for risk on Thursday, pushing U.S. stocks lower [ID:nN08527449], helping U.S. Treasury debt prices to extend their gains in a safe haven bid [ID:nN08329289] and prompting a tumble in the U.S. dollar against the yen. [ID:nN08524849]

Other retailers posting big share declines were Abercrombie & Fitch Co. (ANF.N), down 6.5 percent after saying that fourth-quarter profit would be significantly below its previous forecast [ID:nWNAB7919], and jeweler Zale Corp (ZLC.N), which fell 7.4 percent.

Wal-Mart said groceries and health-related products saw mid-single-digit percentage sales gains in December, while demand for clothing and jewelry was soft.

"Due to the difficult economy and severe winter weather in some regions, the holiday season was more challenging for retailers than expected," said Wal-Mart Vice Chairman Eduardo Castro-Wright.

The report from Wal-Mart was the latest sign of how the recession has prompted consumers to cut down on any but the most essential purchases.

"The economy is in real difficult shape here, and their core consumers, lower- and middle-income consumers, that have really been flocking there cut back on discretionary spending," said Ken Perkins, president of research firm Retail Metrics.