Back-to-school struggle: Wal-Mart posted higher-than-expected August sales, but aside from several discounters (Costco also did well) it was a tough slog. Target posted a 2.1 percent decline today, which was actually better than analysts' estimates, while Limited Brands Inc., the owner of the Victoria's Secret lingerie chain, said that same-store sales fell 7 percent. From Bloomberg:

More customers visited malls at the end of the month than during the ``extremely weak'' first few weeks of August, according to Adrienne Tennant, a retail analyst at Friedman, Billings, Ramsey & Co. Teen retailers, especially those with the most promotions, had the largest amount of shoppers, and many stores struggled to get people to buy at full price, she wrote in a Sept. 2 research note. "You'll see a compressed back-to-school shopping season this year, with consumers waiting until they have to spend really and waiting for the best prices," Patrick McKeever, a retail analyst for Greenwich, Connecticut-based MKM Partners LLC, said today in a Bloomberg Television interview.

Another bad day for stocks: Told you September is the cruelest month. The Dow is down more than 200 points - just a lot of bad economic news out there. (AP)

Mervyn's sues ex-owners: The department store chain says it's in bankruptcy protection because a high-powered investment group stripped the company of its valuable real estate and then nearly doubled its rent. The deal was kind of funky: Cerberus Capital and Sun Capital Partners purchased Mervyn's for $1.26 billion as two separate transactions - one for the retailer and a second one for the retailer's real estate. That enriched the private-equity firms while leaving the retail operations insolvent, according to the suit. (WSJ)

C-17 still lives?: The general in charge of the Air Force's cargo fleet said that additional military demands could prompt new orders for the Boeing cargo plane, which is assembled in Long Beach and employs 5,000 workers. But he added that there was no need for an updated version of the C-17, which Boeing has proposed. From the LAT:

Despite Air Force resistance, Boeing could find more willing advocates within the Army, which is expected to need a larger cargo plane to transport a new family of armored vehicles that it is developing over the next decade. Boeing has been pushing the C-17B with the Army in hope that the Army can persuade the Air Force to consider the new aircraft.

Platinum Equity gets funding: Who says it's tough raising private equity money? Investors committed $2.75 billion to a new leveraged buyout fund launched by Bev Hills-based buyout firm - $1.25 billion more than the amount targeted. CEO Tom Gores, who has acquired 91 companies since founding the firm in 1995, acknowledges that the credit crunch might force him to put up more cash for businesses he buys. (LAT, LABJ)

Signs for Convention Center: The city would collect $2 million a year under a plan in which Anschutz Entertainment Group, owners of Staples Center, would install electronic signs on the Convention Center. A City Council committee approved the plan, which would provide downtown with more of those huge images peddling hamburgers or whatever. (LAT)