What happened

On another down day for the market, retail stocks were among the biggest losers. The consumer discretionary sector, which is among the hardest hit by the COVID-19 coronavirus pandemic, suffered again today as Congress was unable to pass a rescue package valued at $1.8 trillion.

A number of retailers have been forced to close stores and either lay off staff or keep them on payroll while they stay home. Investors are desperately hoping for a lifeline for these brick-and-mortar chains since many could go out of business if they have to keep stores closed for several weeks, especially if a recession follows the health crisis.

Among the retailers whose shares closed Monday down by double digits were Bed Bath and Beyond (NASDAQ:BBBY), which gave up 10.8%; Gap (NYSE:GPS), which fell 13%; and Casey's General Stores (NASDAQ:CASY), down 14.5%.

A stock chart showing an arrow going down

Image source: Getty Images.

So what

Almost all brick-and-mortar chains, unless they sell food or other essentials, are seeing a sharp decline in sales these days, especially as many said they would close stores because of the pandemic.

Today, Bed Bath and Beyond joined the list as the home goods retailer said it would close all its stores with the exception of buybuy Baby and Harmon Face Values, which are considered essential retailers. Of its 1,550 stores, all but 175 will be closed until April 3, and the retailer said it would continue to pay employees and provide benefits during the closure. As of the end of January, the company had $1.4 billion in cash and investments and an additional $250 million credit facility, which should allow it to withstand a longer shutdown. But the situation will no doubt make its turnaround attempt more difficult.

Gap, which announced its own store closures last week, did not have any specific news, but it was one of several mall-based chains that fell sharply today. Apparel retailers like Gap are particularly at risk to the effects of the outbreak: Stores are closed, consumers are focused on buying food and essentials, and the chain is stuck with seasonal inventory that may become unsellable if business doesn't ramp back up soon.

Shares of Casey's General Stores were also down sharply due to the coronavirus, though there was no news out on the company today. As a gas station and convenience-store chain, Casey's is almost certainly seeing a significant decline in business as fewer Americans are commuting and traveling due to lockdown-style orders in effect in several states. Casey's makes most of its profits from its convenience stores and sells prepared foods like pizza, but if consumers aren't on the road, they're unlikely to stop in.

Now what

The pain for the retail sector could get worse in the near term as the spread of the illness in the U.S. shows no signs of abating. That means that many of these retailers, which had only said that stores would be closed for a couple of weeks, may have to keep them shuttered for at least a few weeks longer.

Meanwhile, the state of the economy hangs in the balance as millions of Americans are suddenly unemployed. Without an aggressive spending bill from Congress that keeps everyday Americans on their feet, retailers dependent on consumer spending could sink even further after the outbreak fades and the economic picture comes into focus.