Battered and bruised retail exchange traded funds (ETFs) are springing back to life today as investors invade the market, looking for a bargain or two.

The sector tends to take a beating when times are tough, as investors close their wallets and restrict spending to the bare essentials, reports Joanne Von Alroth for Investor’s Business Daily.

Many analysts believe we’re in a recession, and retail stocks typically turn around at times like these as investors buy in anticipation of the end.

So far this morning, Wall Street has been finding reasons to get back in after the Philadelphia Federal Reserve reported a milder-than-expected drop in manufacturing activity, reports Madlen Read for the Associated Press.

It’s not over yet – one economist says that the markets are apt to remain volatile and have good days followed by bad days as the news is digested.

Some retail ETFs are:

• Retail HOLDRs (RTH): up 2.3% intraday, down 4% year-to-date
• SPDR S%P Retail (XRT): up 2.6% intraday, down 9% year-to-date
• Consumer Discretionary SPDR (XLY): up 2.2% intraday, down 7% year-to-date

Tags: Federal Reserve, Retail, Sector ETFs, XRT