Target Sales, ADP Report Fire Up Retail ETFs

July 7th at 3:45pm by Tom Lydon

Retail exchange traded funds were the strongest sector performers in Thursday’s nearly 100-point Dow rally on blowout sales from Target (NYSE: TGT) and a better-than-expected report on private payrolls.

SPDR S&P Retail ETF (NYSEArca: XRT) and Retail HOLDRS (AMEX: RTH) climbed about 3% on Thursday, while consumer discretionary ETFs also jumped. Target was among the retailers posting a rise in June sales thanks in part to discounting. Target shares vaulted 7%.

“June is also traditionally a clearance month for apparel retailers and we think bargain hunters took advantage of up to 70% savings on spring assortments to do a bit of self-purchasing,” said Standard & Poor’s Equity Research.

The tech sector also rallied Thursday and Semiconductor HOLDRS (AMEX: SMH) added nearly 3%.

The lift-off in stocks the past two weeks has carried small-cap ETFs back near record highs. [Small-Cap ETFs Rally]

Yet recent trading in options on bearish ETFs suggests some institutional investors are hedging against a possible correction, at least in large-cap stocks. [ETF Chart of the Day]

In commodities markets, oil ETFs gained ground after the solid ADP employment report Thursday, one day before the June nonfarm payrolls report. [Oil ETFs Soar]

In industry news, Pimco may soon launch an ETF version of Total Return Fund, which is managed by bond guru Bill Gross. [Pimco Discloses ETF's Fees]

First Trust has listed an exchange traded fund dedicated to cloud computing in another example of a new ETF that targets a specific investment theme or sector. [Cloud Computing ETF]

SPDR S&P Retail ETF


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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