DISCOUNT RETAILERS REPORT GROWTH.(BUSINESS)

Byline: ANNE D'INNOCENZIO Associated Press

NEW YORK -- Consumers, worried about layoffs and shrinking stock portfolios, continued their love affair with discounters in July, but the shift toward lower-priced stores left other top merchants with disappointing sales results.

As retailers reported sales figures Thursday, it was clear that value-oriented stores were the primary beneficiaries of a sales surge in recent weeks that some analysts attributed to the first wave of tax rebate spending and aggressive pricing. Kmart Corp. and J.C. Penney Co. Inc., both of which reported sales that beat Wall Street expectations, are showing signs of a solid turnaround. …