On the same day the government announced that personal spending slowed during March, electronics giant Circuit City said its April sales were substantially below plan and it lowered its outlook for the rest of the year. On Tuesday morning, women's retailer Liz Claiborne said its first quarter net income fell 65 percent, falling significantly short of expectations.

Shares of big retailers stumbled on Monday, as the spending news sparked fear that there could be more earnings shortfalls to come. The entire sector was in the red on Monday, led by declines in Target, Home Depot, and Wal-Mart shares. Consumer spending in March was slower than it's been in five months, even though personal income rose.

Circuit City shares fell nearly 3 percent during the day, and then a further 8 percent in after-hours trading. The company is already in the midst of a restructuring and it had forecast a loss of $40 million to $50 million for the first half of the year, but now it anticipates a loss of $80 million to $90 million in the first quarter. It cited weak sales of flat-panel and projection televisions.

The Wall Street Journal notes that Circuit City's woes started during the fourth quarter last year due to lower average selling prices for some of the high-end TVs. Retailers slash prices in order to capture market share during the holiday season.

Rising oil prices and continued housing weakness could hurt the consumer's pocketbook even more, notes the Los Angeles Times. Vacation home sales fell by 29 percent last year.

All eyes will be on the government's release of auto sales figures later today.