U.S. stocks declined moderately on Monday as weak data on holiday retail sales prompted questions about the consumer's ability to spend.

The S&P Retail index <.RLX> fell 1.3 percent after the National Retail Federation said that total Black Friday holiday spending was down from last year, suggesting that consumers were still reluctant to spend.

So far, the numbers don't look very strong, said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville.

It will be hard to attract shoppers without discounting, which will hurt margins, and given all the stimulus that has been thrown at the economy, this is a disappointment.

Investors are in a quandary trying to assess whether Black Friday was a success for retailers or not. That uncertainty is reflected in the volatility of retailers' shares.

There were some bright spots. Online retailers' shares rose after analytics firm comScore said that online spending was the highest it had ever been on Black Friday, with Cyber Monday spending expected to be even stronger.

Amazon.com Inc shares hit an all-time high of $135.25 in intraday trading on Nasdaq on Monday after it said its Kindle electronic book reader posted its best sales yet in the month of November.

There's been a general shift to online stores, which will help that group, said Keith Springer, president of Capital Financial Advisory Services in Sacramento, California. However, even with that, you can't say that the consumer has recovered or be willing to spend.

By midday on Monday, major U.S. department stores' stocks were taking a beating, with Macy's <.M.N> down 6 percent at $15.95 and Saks Inc down 6.6 percent at $6.10, both in New York Stock Exchange trading.

The Dow Jones industrial average <.DJI> fell 32.72 points, or 0.32 percent, to 10,277.20. The Standard & Poor's 500 Index <.SPX> slid 3.56 points, or 0.33 percent, to 1,087.93. The Nasdaq Composite Index <.IXIC> lost 13.89 points, or 0.65 percent, to 2,124.55.

Following last week's shocking request from Dubai for a standstill agreement on billions of dollars in debt, the Dubai government said on Monday it will not take responsibility for the debts of the Dubai World conglomerate. The Dubai government's statement squashed creditors' hopes that the emirate would guarantee its liabilities.

Concerns about a debt default in Dubai prompted a sell-off in Friday's abbreviated U.S. stock trading session.

But on Monday, investors said the reaction to Dubai's troubles had been overdone, and that tremors would be minor in U.S. equities markets.

Elsewhere on the U.S. economic front, the Institute for Supply Management-Chicago business barometer showed on Monday that business activity in the U.S. Midwest expanded more than expected in November, reaching its highest level in over a year as new orders jumped.

(Editing by Jan Paschal)