The holiday shopping season begins in earnest today, but for the first time in years area retailers are worried that their Christmas will be far from cheery.

Business was showing signs of weakness even before the stock market dropped last month, and local store owners are concerned that apprehensive customers will turn what already had promised to be a lackluster holiday sales season into a dismal one.

To boost sales, many stores already have begun hanging "sale" signs among the Christmas trees, candy canes, poinsettias and other decorations, slashing prices earlier and on more products than ever before.

"My fingers are crossed," said Albert A. Foer, chairman of Melart Jewelers Inc. Like other retailers, Foer suspects that relatively few shoppers were directly affected by the stock market plunge.

Even so, he and others worry that all shoppers may tighten their belts because of the psychological fallout from the stock market. "The larger question is if people remain confident in the future and think their jobs are secure," he said. "Can they go forward in a normal manner without tightening their belts?"

"The stock market crash couldn't have come at a worse time for retailers," said William Smith, a retailing industry analyst with Smith Barney, Harris Upham & Co.

"Everyone is walking on eggshells, hoping business stays the same and doesn't get worse," said James Hayner, district manager of the local J.C. Penney Co. stores. But he predicted, "At this point we think it's going to be a reasonably good Christmas."

Similarly, Richard Hindin, president of Britches of Georgetowne, said he was "optimistic about sales." He added, "I'm not quite sure on what I base my optimism. Sales are better than last year, but slightly behind where we budgeted them to be."

The strength of consumer spending this Christmas "is very critical" to the future of the economy, said David Wyss, chief financial economist of Data Resources Inc., a Lexington, Mass., consulting firm.

"About one-third of all retail sales come in these two months and the consumer accounts for two-thirds of this economy," he said. "Thus, what happens to consumers will to a large measure determine what happens to production and the economy over the next year. If year-to-year sales show an increase, especially in real terms, it may be a sign that we can escape a recession. If we start to see year-to-year declines, that will favor a recession."

For the most part, retail executives remain confident that they will sell more than last year -- although some acknowledge that they will not see large rises.

"I'm not going to stand here and say it's going to be sensational," said Jack Luskin, chairman of Luskin's Inc. "But it's not as bad as the gloom prophets say -- we think sales will be a little better than flat."

Similarly, Best Products Inc. said it was expecting only "a nominal increase in fourth quarter sales."

Other retailers are more optimistic. J. Warren Harris, chairman of The Hecht Co., said that based on sales last weekend, he is "looking forward to Christmas with great enthusiasm."

Michael Lavington, president of Kay Jewelers Inc., said a recent spurt in sales means he is now "looking for a rather good Christmas -- better than I had expected." Initially, Lavington had expected sales to increase 7 to 8 percent over last year. "I would have been very happy with that." But the recent unexpected increase in sales means, "We're looking at double-digit increases over last year."

At Circuit City, treasurer Larry Wilson said: "We don't think the consumer has died. He's alive and well and anticipating normal spending plans for Christmas."

To guarantee that sales continue briskly, many retailers have launched promotions. More are expected as Dec. 25 nears.

"We are seeing a greater volume of sales than we have in the past, because retailers are somewhat antsy about what's going to happen," said Jeffrey Shapiro, a senior economist with the economic consulting firm WEFA Group in Bala Cynwyd, Pa.

"If you're a consumer, wait to shop," advises Kenneth M. Gassman Jr., a financial analyst with Wheat, First Securities in Richmond. "You'll have your choice of merchandise at discounted prices after Dec. 1."

If consumers wait until the last few days of the shopping season to buy -- as they have increasingly done in the past few years -- there should be even more bargains as retailers become nervous and try to move their goods out of the stores.

With retailers wary about consumer spending, many have cut back their orders or halted plans to reorder, retail executives say. "Some of the buyers have already broken their pencils," said Walter F. Loeb, an analyst at Morgan Stanley & Co., the New York stock brokerage. "Others are reordering only the basic merchandise, like underwear and socks."

Overall, Loeb predicts retail sales this holiday season will climb by 6 percent. "That is lower than last year, when they rose 8 percent over the previous year, and less than anticipated," he said. "My earlier forecast was a gain of 7 percent. But it is still a moderate increase."

Another factor may boost sales a little bit further, Gassman suggested. "The weather, especially in the mid-Atlantic region, is predicted to be a cold, snowy December." Not only will that get shoppers into the Christmas spirit earlier, but it also means brisker sales for coats, jackets, boots, heavy sweaters and other winter wear.

In Washington, the surprise snowstorm on Veteran's Day sharply cut into retailers' sales. Even so, retailers now say it infused a new spirit into sagging sales and seemed to bring out more shoppers in mid-November than had been anticipated.

"Sales picked up recently after the big snowstorm," said Scott Goode, owner of Lowen's toy store in Bethesda. Even so, he said, "to be frank, business isn't good. It's been a flat, flat year." The reason, Goode said, is simple: "There has been not one single hot toy this year -- no Cabbage Patch doll, Trivial Pursuit game, G.I. Joe or Teddy Ruxpin. The whole industry is really flat."

In fact, Goode said the top seller today is the 25-year-old Barbie doll, with G.I. Joe in second place.

Although they are not considered on the scale of Cabbage Patch dolls or other previous winners, the most popular new items this year are in such demand that they seem impossible to get, retailers say. That is particularly true of Fisher-Price toys, including the $69.99 "Fun with Food" Kitchen and a $225 video camera and recorder for kids. "Everything {Fisher-Price} has is so popular and hot nobody can get it," Goode said.

Another popular new game -- Pictionary, which is played like charades but on paper -- is also "impossible to get," Goode said.

Retailers also complain that there are few hot new items for adults. Among the few mentioned are a clothes shaver that removes fuzz balls from sweaters and wool clothes, a hair crimper and a battery-operated "spice box express" that fits under a cabinet and is arranged so cooks can quickly find spices.

Another big seller, predicted Jack Luskin, will be inexpensive microwave ovens. "With some selling at price levels as low as $75, they will go like popcorn.