CHICAGO (Reuters) –
U.S. retailers are likely to get an "incomplete" mark for the key back-to-school season when they report August sales this week, as a later Labor Day is expected to pull some sales into September, pressuring August results.

Retailers that report August sales -- a group that does not include industry giant Wal-Mart Stores Inc (WMT.N) -- are expected, on average, to post a decline of 3.9 percent in sales at stores open at least a year, according to Thomson Reuters data.

Investors are looking for signs that consumers, who account for about 70 percent of U.S. economic activity, are loosening their purse strings after pulling back during the worst recession since the Great Depression.

"It's going to be watched very closely," Ken Perkins, president of Retail Metrics Inc, said of August sales data. "Did anyone go out and start picking up their discretionary spending here?"

Retail stocks have rallied sharply since early March, helped by cost cuts that helped offset falling sales. The Standard & Poor's Retail index (.RLX) is up more than 56 percent since early March, though some analysts say retailers will need to start showing sales improvement for the stocks to rally much further.

WHEN IS LABOR DAY?

The sales view is likely to be distorted by the shift of Labor Day -- which falls on the first Monday in September -- to September 7 in 2009 from September 1 in 2008. That shift means seven more pre-Labor Day selling days, including the entire holiday weekend, will be in the September sales reporting month this year. Last year, the Saturday of Labor Day weekend fell in August.

"A lot of people traditionally wait for that Labor Day weekend to do their back-to-school shopping," Perkins said, estimating that a couple of percentage points of sales growth could be lost this August.

But some of the impact from the later Labor Day will be muted by a shift of some states' sales tax "holidays" into August from July, analysts said.

Overall, a better look at the back-to-school season -- often seen as a harbinger of the Christmas holiday selling season -- will be seen by combining August and September sales this year.

"There are some tricks of the calendar this year, with variations in tax holidays and a delayed back-to-school season, so there may be volatility in August sales and September" sales, Lawrence Creatura, a portfolio manager at Federated Investors, said.

Still, there are some signs of brighter consumer sentiment and economic improvement, which could help sales going forward. The U.S. economy shrank less than expected in the second quarter and fewer workers filed new claims for jobless benefits last week, among the latest signs that the economy could be shrugging off the recession. [nN27303398]

"If there is an uptick, then the holiday season could have a chance at a modest season, not just an absolutely terrible one like (retailers) had last year," Perkins said.

Most retailers have seen sales hammered by the recession, though discounters and other stores seen as offering value for cash-strapped consumers, such as TJX Cos Inc (TJX.N), have benefited.

"I can't tell you how many people I talk to who say they are doing their back-to-school shopping at Ross (ROST.O) or T.J. Maxx," Patricia Edwards, founder and chief investment officer at Storehouse Partners, said. "It's becoming chic to save money."

Ross and TJX are both expected to post higher same-store sales in August, with all apparel retailers expected to show a 3.2 percent decline, according to Thomson Reuters data. Discount retailers are expected to show a 5.6 percent decline, while department stores are seen down 6.9 percent.

Same-store sales at teen and child apparel retailers, which are particularly affected by back-to-school sales, are expected to be down 9.5 percent.

(Reporting by Brad Dorfman; Editing by Richard Chang)

NEW YORK (Reuters) –
Bank of America (BAC.N) is offering to repay part of the U.S. government bailout money, starting with the $20 billion it received in January to help with the acquisition of Merrill Lynch & Co, the Wall Street Journal reported on its website late on Monday.

The government is meanwhile pushing the bank to pay up to $500 million to end a tentative pact that would have had the government share Bank of America's losses on certain assets, added the report, which cited people familiar with the matter.

Bank of America is not offering to repay all of the $45 billion in taxpayer funds it received from the government's Troubled Asset Relief Program, the report said.

The repayment of $20 billion, however, would remove the bank from the list of "exceptional" aid recipients, a designation that brings more congressional scrutiny.

The U.S. Treasury and Federal Reserve have asked the bank to pay between $300 million and $500 million to end a tentative plan that would have seen the government absorb a portion of losses on assets owned by Bank of America and Merrill Lynch, the report said.

In exchange, the plan called for the bank to issue $4 billion in preferred stock to the Treasury, costing it about $320 million a year, the report said.

A Bank of America spokesman did not immediately return a call seeking comment.

(Reporting by Jonathan Spicer; Editing by Lincoln Feast)

CHICAGO (Reuters) –
Boeing Co (BA.N), which has experienced a series of embarrassing and costly delays on the long-awaited 787 Dreamliner, said on Monday that Scott Carson, the head of its commercial airplanes division, is retiring and will be replaced by Jim Albaugh, effective on Tuesday.

The news comes four days after Boeing said it would finally make the first flight of the 787 by the end of this year. Boeing is the world's top aircraft maker followed by EADS (EAD.PA) unit Airbus.

The first test flight has been delayed repeatedly because of production problems and a two-month labor strike, hurting Boeing's credibility as it grapples with the commercial aerospace slump. At least one expert said the management change does not necessarily improve Boeing's fortunes.

"Where we are surprised is in Boeing's choice of successor, given Jim Albaugh's lack of experience in commercial aerospace, and the less than perfect track record that IDS has had in program execution and wins over the last couple of years under his leadership," said Rob Stallard, analyst with Macquarie Securities.

"We are not convinced that this move improves the situation at BCA (Boeing Commercial Airplanes), and we reiterate our Neutral rating on Boeing," Stallard wrote in an analyst note.

Stallard noted that Albaugh was taking on several pressing issues, the first flight of the 787, and how to proceed with the 737 program given delivery deferrals over the last 12 months.

Shares of Boeing, a Dow component, were unchanged in after hours trade from the $49.67 closing price on the New York Stock Exchange.

Carson, 63, who has led the unit since 2006, will work on transition and other projects till year end, the company said. Speaking on a media conference call, Boeing Chief Executive Jim McNerney said Carson made the decision to step down.

"The decision to retire was Scott's," McNerney said. "It was based on many factors, the most important of which was resetting the 787 schedule last week and giving his successor a clear path forward on the program."

Albaugh, 59, has headed Boeing's Integrated Defense Systems (IDS) since 2002, overseeing some of Boeing's largest systems integration contracts, including the $160 billion Future Combat Systems modernization program and the multibillion-dollar ground-based segment of missile defense.

"Jim is a seasoned and effective aerospace executive with substantial experience leading and integrating technically complex businesses and programs from initial development through full production and delivery," McNerney said in a statement.

McNerney said Albaugh already has "working knowledge" of BCA and the 787 program from his role on the senior leadership team at Boeing.

Some analysts had questioned Albaugh's future after the company lost several large defense competitions in recent years and saw its biggest programs cut by Defense Secretary Robert Gates as part of a sweeping overhaul of Pentagon procurement.

A Boeing spokesman said most IDS development and production programs under Albaugh's watch were on time and on budget and earned solid earnings for Boeing.

Dennis Muilenburg, 45, got good reviews for his work running the Future Combat Systems program before moving over to head Boeing's support services division.

Chicago-based Boeing said Carson and Albaugh will work together to ensure a smooth transition of customer and other business relationships and that Carson will also assist on special projects for the company through year end.

Jim McAleese, a Virginia-based defense consultant, said the move came amid pressure from large institutional shareholders, who were growing increasingly worried about the 787 program.

He said many questioned if the 787 wing lamination issue could not have been found earlier through a more rigorous engineering and testing process.

He said Albaugh was a seasoned manager with years of experience running complex programs.

"I see no problem with Albaugh. He is probably the most qualified, seasoned senior manager they have right now and in a damage control and restructuring process, you pick the best you have," he added.

(Reporting by Deena Beasley, Andrea Shalal-Esa, Bill Rigby and Kyle Peterson; editing by Bernard Orr, Gunna Dickson and Andre Grenon)