SAN FRANCISCO (Reuters) - Shares of bookseller Borders Group Inc and athletic shoe seller Finish Line Inc plummeted during volatile trading in consumer stocks on Friday, as fears of a worsening retail environment took hold days before the holiday season November 21st kicks into high gear.

"Any bad news, even a little bit of bad news, can trigger these stocks to just tank," said B. Riley analyst Jeff Van Sinderen, who follows footwear and apparel retailers.

"There's tremendous fear," he added. "A lot of the fear is irrational, but by the same token I think there's a lot of concern about the fact that we really don't have visibility into how the macro (economy) is going to be and how long the downturn is going to last."

Various retail stocks have been shaky in recent weeks as companies brace for what is expected to be the worst holiday selling season in decades.

Shares of Borders, which put itself up for sale earlier this year, fell as low as 72 cents, down 47 percent, before recovering somewhat to 93 cents in afternoon trade.

The drop came a day after larger rival Barnes & Noble Inc posted a worse-than-expected loss on Thursday and cut its full-year forecast. Shares of Barnes & Noble were up 4 percent on Friday.

Borders reports its quarterly earnings on Monday. Besides slowing sales, investors are concerned about the company's weaker balance sheet, said Morningstar analyst Joseph Beaulieu.

Hedge fund investor Pershing Square has been pushing for a sale or restructuring of Borders, which in this depressed environment could mean that shareholders end up holding the short end of the stick.

"Pershing has thrown money at them before. If they have the funds, they might bail them out but that would be massively dilutive to shareholders," Beaulieu said.

The hit to Finish Line on Friday followed disappointing earnings the day before from larger competitor Foot Locker Inc , which lowered its 2008 profit outlook.

Still, the blow to Finish Line, shares of which fell as much as 28 percent to $3.42 before bouncing back a bit to $3.97, appeared more irrational, said one analyst.

"You can't explain. There's no way to sit here and explain," said Van Sinderen, citing Finish Line's strong balance sheet and good brands.

"We're just in an environment where you've got a tremendous amount of forced selling as some funds liquidate and a lot of funds are getting redemptions ... and they have no choice but to sell stocks," Van Sinderen said.

On a day when Nordstrom Inc fell as much as 21 percent, Casual Male Retail Group Inc 41 percent, Red Robin Gourmet Burgers Inc 23 percent and Collective Brands Inc 35 percent, a bit of good news came from global apparel retailer Gap Inc .

On Thursday, Gap's quarterly earnings per share beat Wall Street estimates by a penny and the company stood by its full-year forecast.

Gap shares rose over 16 percent in early afternoon trade to $11.05, following upgrades by Citigroup and Cowen and Co. Citigroup upgraded shares to "buy" from "hold," citing the company's strong balance sheet and disciplined inventory management.

Cowen raised its rating on Gap to "outperform" from "neutral," calling the shares "too cheap given cash flows and solid balance sheet."

Still, the rally in Gap only came after the shares hit a new six-year low on Thursday ahead of the quarterly report.

The Standard & Poor Retail Index .GSPMS was down 1.2 percent in early afternoon trade.

(Reporting by Alexandria Sage, editing by Gerald E. McCormick)