Kohl’s Leads Retail ETFs to New High

May 12th at 6:47pm by Tom Lydon

Equity exchange traded funds (ETFs) rebounded Thursday as Kohl’s led the retail sector to new highs.

ETFs that invest in retail stocks rose Thursday after Kohl’s (NYSE: KSS) reported higher quarterly net income and boosted its full-year outlook. Kohl’s shares added 4% in the wake the department store operator’s quarterly update. Sector ETFs that hold the stock such as Retail HOLDRS (AMEX: RTH) and Consumer Discretionary Select Sector SPDR (NYSEArca: XLY) were significantly higher Thursday. [Retail ETFs Higher After Kohl's Results]

Retail HOLDRS

Traders are using options contracts on ETFs to bet on strength in technology stocks and the U.S. dollar, Street One Financial said Thursday. Tech ETFs were pressured by weakness in Cisco (NasdaqGS: CSCO) as the company’s outlook left Wall Street disappointed. [Option Traders Stalk Tech ETFs as Cisco Weakens]

The U.S. dollar has gained some strength with commodities markets falling on profit taking and higher margin requirements. A weaker euro has dragged on the commodities market and ETFs are moving on the news. PowersShares DB US Dollar Bullish Fund (NYSEArca: UUP) has been catching a bid lately while the euro weakens. [Greenback ETF Makes Gains as Commodities Trip]

An $11 billion ETF indexed to the Dow Jones Industrial Average is up about 10% so far this year but its gains have been capped by weakness in blue chips Bank of America (NYSE: BAC), Microsoft (NasdaqGS: MSFT) and Cisco (NasdaqGS: CSCO). The three stocks are the worst performers in the Dow so far in 2011, [Bank of America, Microsoft, Cisco Trip Dow ETF]

After heavy expansions in sugar farming during peak prices, sugar prices and a related exchange traded note (ETN) are suffering the consequences of an oversupplied market. The iPath DJ-UBS Sugar ETN (NYSEArca: SGG) is down nearly 30% year to date. It has been at the leading edge of the commodities rally and the recent pullback. The ETN tracks the movement of sugar futures. [Sugar ETF Crashes Nearly 30%]

A 3.5% pullback in Goldman Sachs (NYSE: GS) on Thursday following downgrades from Wall Street analysts dusted up ETFs that invest in the U.S. financial sector. Dick Bove at Rochdale Securities cut Goldman shares to sell from neutral and lowered his target price on the stock to $120 a share. [Goldman Sachs Downgrades Claw Financial ETFs]

Gregory A. Clay contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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