* Same-store sales index up 3.4 pct vs 4.5 pct view
* Costco, Target, Macy's, Saks, Limited miss Street views
* Penney, Gap comp sales fall
* ICSC sees Nov. same-store sales up 3.5-4 pct
* S&P Retail Index up 0.6 pct, S&P 500 up 1.5 pct (Updates share prices)
By Phil Wahba
Nov 3 Sales at major U.S. retailers rose in October but not as much as Wall Street analysts had thought, showing that consumers are still anxious about the state of the economy as they begin their holiday shopping.
Chains up and down the price spectrum, from Macy's Inc and Saks Inc to those catering to more frugal shoppers such as Target Corp and J.C. Penney Co Inc reported lower-than-expected sales at stores open at least a year.
Even as the stock market rose last month, unemployment barely budged, and shoppers faced a barrage of scary headlines last month about the economy that gave them pause about spending, experts said.
"This uncertainty, the news changing every day, it causes a freeze," said Wharton School professor Barbara Kahn.
Overall, the 23 major U.S.-based retailers that report monthly results posted a composite 3.4 percent gain in sales at stores open at least a year, according to Thomson Reuters data.
That missed the 4.5 percent increase that Wall Street was expecting. but was more than the 1.6 percent gain in October 2010.
Retailers that have struggled recently against rivals reported some of the biggest misses: Penney and Gap Inc posted comparable-sales declines.
Despite the tepid month, retailers by and large did not lower their own sales and profit forecasts.
Macy's said it still expected a gain of 4 percent to 4.5 percent for the current holiday quarter, while Gap and Limited Brands even raised their outlooks for the just-ended period.
Costco, a perennial winner as shoppers seek low prices, reported U.S. same-store sales rose 9 percent, which were below Wall Street forecasts of 9.8 percent.
The Standard & Poor's Retail Index was up 0.6 percent in the afternoon, recovering after earlier losses. That compares with a 1.6 percent rise for the broader S&P 500. The biggest losers included Saks, down 2 percent, and Target, down 1 percent. Gap shares were up 3.5 percent.
Abercrombie & Fitch reported strong U.S. sales in the current quarter, but its shares fell 21 percent after it reported weak international sales. The chain does not report monthly sales.
STILL SPENDING, STILL ANXIOUS
Several companies that have regularly beaten Wall Street forecasts had a disappointing October.
Macy's said sales suffered because of a warm start to the month, which prompted people to delay buying winter clothes.
Limited Brands, the parent of Victoria's Secret, narrowly missed analysts' estimates with a 6 percent rise in sales at stores open at least a year and forecast a slower pace of gains for November.
The International Council of Shopping Centers expects same-store sales to be up 3.5 percent to 4 percent this month. Chief economist Michael Niemira said he expected a "slower but more sustainable pace of growth" in the coming months after several months of large gains.
Retailers came off a strong back-to-school season, but that doesn't mean shoppers are any less careful, analysts said.
"Now going into the holiday season, consumers are going to start to be more selective," said Kurt Salmon retail strategist Megan Donadio. "They want to make sure they are getting value."
Consumer confidence did brighten a bit but was still low compared with historic levels.
October is historically the third-smallest month for sales but with holiday shopping starting earlier than ever, the numbers are a foretaste of that all-important season.
Bright spots included Kohl's Corp, which reported a 3.9 percent gain, and Zumiez Inc, which also beat forecasts.
Off-price retailers TJX Cos Inc and Ross Stores Inc, which sold designer brands at major discounts, were also big winners. Ross raised its profit forecast.
Overall, some analysts faulted Wall Street for underestimating how much caution is still out there.
For example, upscale Nordstrom Inc missed analysts' lofty expecations despite a 5.4 percent same-store sales rise.
"This is expectations getting ahead of reality," said AlixPartners Managing Director Joel Bines. "It's still a solid performance," he said of U.S. retail sales reports on Thursday.
(Reporting by Phil Wahba in New York; Editing by Lisa Von Ahn and Richard Chang)