** Shares of retailers and restaurants were down sharply on Monday even as the S&P 500 .SPX pared early declines to show moderate losses

** Oil prices extended their recent surge, fanning worries about consumer spending, as the U.S.-Iraeli war against Iran raged on

** The S&P 500 retail index .SPXRT was down 1.6%, while an S&P 1500 restaurants index .SPCOMREST was down 1.1%. The S&P 500 was last down about 0.5%

** Consumer discretionary .SPLRCD, down 1.6%, was among the biggest sector decliners in the S&P 500 index on Monday. Consumer discretionary was down 1.4% last week

** Shares of Estee Lauder EL.N were down 3.8%, while Best Buy BBY.N was down 2.9%, Target TGT.N was down 1.8% and Kohl's KSS.N was down 6.7%. Among restaurants, Darden Restaurants DRI.N was down 2.5% and Chipotle Mexican Grill CMG.N was down 2.9%

** Analysts have noted the potential negative impact of higher oil prices on consumer spending. Among them, Raymond James analyst Tavis McCourt wrote in a note late Sunday: "A simple rule of thumb is oil price up/down $20/barrel, is ~$150 billion tax on annual consumer spending."

(Reporting by Caroline Valetkevitch, editing by Colin Barr)

((caroline.valetkevitch@thomsonreuters.com))