Gap shares fall 14% as Old Navy disappoints

Gap shares dropped 14%. The company cut its sales forecast and reported weak results at Old Navy, its biggest brand, CNBC reported. Sales there came in below what Wall Street expected.

Old Navy is the value brand most used by budget-conscious families. When it slows, it often means shoppers are cutting back on basic spending. That makes the weak result a useful read on the health of the everyday American consumer.

The picture across retail is mixed, which fits a stretched economy. Best Buy shares jumped 15% on a strong quarter. Costco said it saw record gas volumes as fuel prices rose. Costco's note is telling. Higher prices at the pump pulled in first-time customers looking for cheaper gas.

There is also a debt angle worth watching. CNBC reported that more monthly car loan payments now top $1,000. Most are for ordinary pickup trucks, not luxury models. When families borrow heavily to afford basic purchases at high interest rates, it shows how much cheap credit pulled spending forward in earlier years.