South Korea's ETF Boosted By Retail Numbers

South Korea's exchange traded fund (ETF) shot up a nice 3% in trading yesterday, possibly owing in part to expanding department store sales.

They expanded for the fourth consecutive month, reports Seyoon Kim for Bloomberg. Consumers snatched up luxury items, clothes and food, which sent sales up 6.5% from a year earlier. March sales rose 6.7%.

One of those stores, Shinsegae, is 2% of the iShares MSCI South Korea (EWY). Year-to-date it's down 10%. The consumer goods sector makes up 26% of the fund.

On the flip side is that the country's vice finance minister said the economy is in a downturn much like the rest of the world. The jobless rate rose to a five-month high in April as manufacturers, builders and retailers let workers go. This could be an indication that department store sales may cool.

Britain's biggest retailer is planning to purchase 36 discount stores from South Korea's E-Land for $1.9 billion, report Rhee So-eui and Rachel Sanderson for Reuters. This acquisition could challenge Shinsegae, which runs the top-ranked E-Mart chain.

The country is Tesco's second most profitable market after Britain, and this expansion might be seen as a sign that Tesco has faith in the strength of the South Korean economy.

Playing Defense With the Domestic Portion of Your ETF Portfolio

Have you been playing defense with your exchange traded fund (ETF) portfolio lately?

If so, good. The time to dribble to the other side of the court has not occurred, as the domestic market has not yet fully rebounded. There will come a day that some beleaguered areas such as financials will inch back over their long-term trend lines, but until then, there are ways to protect yourself.

Eric Bolling for The Street has a few ideas of defensive type ETFs to help keep yourself protected in the meantime.

• Consumer Staples Select Sector SPDR (XLP), down 2.1% year-to-date
• PowerShares International Dividend Achievers (PID), down 2.8% year-to-date

While both funds are down year-to-date, they're currently sitting above their trend lines (200-day moving average).

PID gives an international play on companies that pay dividends. By default, this ETF actually plays the weak side of the U.S. dollar and strengthens by other currencies upswings such as the yen, euro and yuan. XLP focuses on daily necessities such as toothpaste and toilet paper, items you aren't going to go without no matter how dire your straits. Well, we hope.

We say that if an ETF is below the 200 day-moving-average, it is recommended not to go in. Of course, if you're interested in more of a short-term play, you can use the 50-day moving average as your sell point instead.

But always make sure the trend is right before you invest, and remember that just because one area isn't performing, it doesn't mean that all areas are depressed.

Protect Your ETF Portfolio If That Boom Goes Bust

When a particular "boom" goes "bust", what should investors do with their related exchange traded funds (ETFs)?

Gary Gordon for ETF Expert takes us back to 2000: the dot-com bulls were running rampant, convinced that the stock prices for those companies could do nothing but soar. In more recent years, the same craze spread through the real estate markets: the world is getting more crowded, there are fewer places to build and it can only send prices higher.

We all know very well by now how that turned out. But Gordon says that this isn't necessarily to suggest that the newest booming sector - commodities - is primed for a fall. But he does stress that investors should recognize the psychology of fear and greed.

It's a fact: booms go bust. Therefore, investors need to have a plan to sell.

Some resource ETFs are particularly attractive now, to be sure. Food is scarce. Water is scarce. Oil seems like it can't be stopped. Naturally, investors will be taking a look at such funds as S&P Metals and Mining (XME) or the PowerShares Water Resources Fund (PHO).

It's okay to get in those areas that are moving and above their trendlines. What's not okay is hanging on as it falls below that line or 8% off its high and hoping against hope that things will turn around.

Now that consumer spending is at a stand still and real estate investment trusts are unattractive, what do savvy investors do? They bargain hunt! There are values to be had if you look for them. For instance, the Vanguard REIT Index (VNQ) is above its long-term trendline and has outperformed the broader market for 2008. The Retail HOLDRs (RTH) has followed suit, sitting above its trendline.

For full disclosure, Tom Lydon's clients own shares of RTH.

Home Foreclosures and Food Prices Up and ETFs Are Mixed

Real estate and home builder exchange traded funds (ETFs) are mostly higher this morning, even after foreclosures shot higher in April.

The number of U.S. homeowners falling behind on their mortgage payments rose 65% last month over the same month last year, which sent home values down even further, reports Alex Veiga for the Associated Press. One in every 519 U.S. households received a foreclosure filing, and they increased in all but eight states.

Several real estate and homebuilder ETFs were trading higher - perhaps investors think this might be as bad as it gets? As eager as we all may be for a turnaround, we suggest sitting back and waiting for any uptrend to be on more solid footing and crosses the 200-day moving average. Trying to call the bottom can be a losing battle.

Among the related ETFs:

• iShares FTSE NAREIT Real Estate 50 Index (FTY), up 8.1% year-to-date
• First Trust S&P REIT Fund (FRI), up 8.6% year-to-date
• DJ Wilshire REIT (RWR), up 10.1% year-to-date
• SPDR S&P Homebuilders (XHB), up 10% year-to-date

Inflation in April eased up some, but food prices experienced their biggest jump in 18 years, reports Martin Crutsinger for the Associated Press. Consumer prices rose 0.2% in April, compared to a 0.3% rise in March. Energy delivered a flat reading, which helped offset a 0.9% rise in food prices across the board.

Among the agriculture ETFs, which are mostly static in early trading:

• Market Vectors Global Agribusiness (MOO), up 7.5% year-to-date
• PowerShares DB Agriculture (DBA), up 11.2% year-to-date
• iPath Dow Jones Agriculture (JJA), up 6.6% year-to-date

The Market Will Eventually Swing Back, But Which ETFs Can We Turn To?

It doesn't seem like it now, but the markets won't always be depressed and there will come a time to get back into exchange traded funds (ETFs).

But will the ETF marketplace benefit when the pendulum swings back? The debate is still hot concerning the market's recent progress and whether the worst is behind us yet. Investors should be ready to be in a good position to capture the next upswing, whenever it takes place.

Investors who have been in cash as they've waited for the markets to recover are going to start looking around for places to put their money back in, and ETFs are going to prove to be an attractive option for them. They offer low fees, intraday trading, transparency and quick diversification. As word of them spreads, we predict big growth in them because of their attractiveness.

Billy Fisher for The Street spoke to Mark Luschini, a strategist for Janney Montgomery Scott, who reports some probable areas set up for a prolonged recovery-primarily financials and consumer discretionary. ETF investors should consider positions in:

• Financial Select SPDR (XLF), down 8.4% year-to-date
• Vanguard Financials (VFH), down 7.6% year-to-date
• iShares Dow Jones U.S. Financial Sector (ITF), up 0.3% year-to-date
• Vangurd Consumer Discretionary (VCR), down 1.9% year-to-date
• PowerShares Consumer Discretionary (PEZ), down 3.6% year-to-date
• Consumer Discretionary SPDR (XLY), up 0.6% year-to-date

Financials have taken their share of the beating, so any upward trend is going to help them shine.

We recommend that you wait until any funds you're eying cross their trend lines, however. Don't just get in because you think an area is going to turn around. Take a look at our strategy for getting back in.

Home Sales and Retail Numbers Drop, But ETFs Trying to Keep Status Quo

The markets and exchange traded funds (ETFs) appear to be mostly chewing on the news about retail and housing before they make any rash moves.

The price of a single-family home dropped 7.7% in the first quarter, making for the biggest year-over-year decline since record-keeping began in 1982, reports Les Christie for CNN Money. The median sales prices also fell 4.8% compared to the last three months of 2007.

Real estate and homebuilder ETFs, however, were mixed in early trading. Among them:

• SPDR S&P Homebuilders (XHB), up 10.5% year-to-date
• iShares Dow Jones US Home Construction (ITB), up 7.3% year-to-date
• DJ Wilshire REIT (RWR), up 9.9% year-to-date
• iShares Dow Jones US Real Estate (IYR), up 7.5% year-to-date

Retail numbers for April came out today, as well, and they were down for the second consecutive month, reports Martin Crutsinger for the Associated Press. The usual bugaboos of high gas prices and skyrocketing food costs were the culprits.

The Commerce Department said sales were down 0.2%, and that auto sales were down 2.8%. It was the biggest setback for that category in 10 months. Excluding autos, however, retail sales actually rose 0.5% and it was better than expected.

Wal-Mart (WMT) in particular announced higher earnings this morning - a sign that people are continuing to bargain hunt and stretch their dollars as far as they'll go.

Much like the housing ETFs, retail-related ones were still digesting it all in early trading:

• SPDR S&P Retail (XRT), down 0.1% year-to-date
• Retail HOLDRs (RTH), up 3.5% year-to-date
• PowerShares Dynamic Retail (PMR), up 3.1% year-to-date

For full disclosure, some of Tom Lydon's clients own shares of RTH.

Will ETFs Remember Mother's Day When the Numbers Come Out?

All those cards, flowers and assorted other gifts you picked up for your mom might benefit retail exchange traded funds (ETFs) when the numbers come out.

You splurged, right? Some of you waited until the last minute, though. You don't fool us.

Did you get her a nice Louis Vuitton bag? Perhaps you helped the Claymore/Robb Report Global Luxury (ROB). It could use the boost, because year-to-date it's down 7.3%. Louis
Vuitton is 5.9% of the fund.

Maybe you grabbed that last-minute gift at the grocery store. The PowerShares Dynamic Food & Beverage (PBJ) could get a lift from that, since Safeway (SWY) is 2.7% of the fund, which is down 1.4% year-to-date.

Maybe you'll take her on a shopping spree at her favorite mall. SPDR S&P Retail (XRT) might benefit if she stocks up on clothes from Ann Taylor (ANN, 2%), J.Crew (JCG, 2%) and books from Barnes & Noble (BKS, 2%). Year-to-date, the fund is down 2.9%.

Happy Mother's Day!

European Large-Caps On Their Way Up To Help ETFs

Although the U.S.dollar is weak, and the credit crunch has tightened the cash flow, European large-caps don't seem to be feeling this.

Exchange traded funds (ETFs) that hold European large-cap stocks include Vanguard European Stock (VGK) and the iShares S&P Europe 350 (IEV), both of which are down year-to-date, but have been ticking back up during the past four weeks.

VGK in the last month has risen 2.1%, but is down 3.1% year-to-date. IEV is up 1.7% in the last month, but down 3.4% year-to-date.

VGK is made up of bigger firms, while IEV is actually five years older. IEV holds 600 companies while VGK holds 348. The ETFs track different indexes, the MSCI Europe Index for IEV and the S&P Europe 350 Index for VGK.

Both ETFs give exposure to large, Western European companies and currencies, reports Joanne Von Alroth for Investor's Business Daily. The large-caps that make up these funds have performed well recently.

But not all is rosy in Europe: the European Union is battling 3% inflation, a credit crisis and high food prices. Some retailers have seen sales fall. But there's optimism, too, since in April both France and the United Kingdom saw their highest monthly benchmark index gains in nearly five years.

Retail Numbers Looking Better, But ETFs Are Weighing Down

Retail exchange traded funds (ETFs) were down midday today despite better-than-expected numbers from retailers.

Despite the more positive numbers, though, it was still suggested that consumers are curbing their spending in the wake of higher energy and food prices. Wal-Mart (WMT), for example, said sales of groceries, medications and flat-screen TVs boosted sales by 3.2% in April, reports Madlen Read for the Associated Press.

But apparel stores continued to be hit with depressed sales as people cut back spending for new clothes and take the cash to the grocery store or the gas station. The job market is also hurting consumers - there have been four consecutive months of net losses.

Among the ETFs trading lower this morning after the reports:

• Retail HOLDRs (RTH), up 2.4% year-to-date
• Consumer Discretionary SPDR (XLY), down 1% year-to-date
• PowerShares Dynamic Retail (PMR), up 0.4% year-to-date
• Rydex S&P Equal Weight Consumer Discretionary (RCD), up 0.6% year-to-date

For full disclosure, some of Tom Lydon's clients own shares of RTH.

Read the disclosure, as Tom Lydon is a board member of Rydex Funds.

ETFs Affected by the Consumer Price Index, But How Is It Put Together?

When the Federal Reserve makes decisions that cause the markets and exchange traded funds (ETFs) to move, one of the things they consider before making that call is the rate of inflation.

One facet of the rate of inflation is the Consumer Price Index, which is put together by the Bureau of Labor Statistics. It gathers 84,000 prices in 200 categories - everything from gasoline, bananas, clothing and garbage collection.

The New York Times put the form of an interactive graphic, and it's worth a look.

Filipinos in Austria and ETF Feel Effects of Inflation

Rising inflation in Austria could help eat the way to a rise in the related exchange traded fund (ETF).

Filipino workers there are getting creative on ways to satisfy their daily dietary needs. For example, instead of eating rice, the price of which has shot up 30% lately, they're looking at potatoes and salad. The products are cheaper, but still nutrient-rich.

Consumer prices overall have inflated by 0.8% during April alone. They're up 3.5% for the year. 

Among the hardest-hit areas is that of food products, which are a basic need, reports Hector Pascua for ABS-CBN News. Rising fuel prices are to blame for the rise in food prices, similar to what we're seeing in the United States.

Is the iShares MSCI Austria Index (EWO) feeling the effects of a 7.8% rise in food prices for April, and the transportation fares rising 7.3%, all driven by the 26% increase in fuel prices? Consumer services only make up 0.96% of the ETF. Financials are 34.7% of the fund, however, and energy is 14.4%, so any increase may be reflected soon.

Year-to-date, the fund is up 1.8%. In the last month, it's up 7.9%.

Media ETFs Poised To Benefit From Higher Oil Prices

Disney (DIS) demonstrated the importance of being diversified with your exchange traded funds (ETFs) when it announced its earnings today.

The numbers came in better-than-expected, with a 22% rise in quarterly earnings, reports Gina Keating for Reuters. A weakening economy didn't stop people from visiting the theme parks, and "Enchanted" sold well on DVD and in foreign theaters.

But what about this summer, as fuel prices show no signs of stopping their ascent? The company's theme parks division could be hurt by the rising costs, as people opt to stay home this summer instead of rounding up the family for a trip to the Magic Kingdom. And in past recessions, reports Janet Babin for Marketplace, the cruise lines have suffered as well.

But the company might be able to tough it out, because its largest source of revenue actually comes from ads on its TV network. Disney also is involved in things such as movies, cable channels, network channels and resorts.

In other words, Disney hasn't put all its eggs in one basket, and neither should you. Remaining spread out could protect you if one sector hits a slowdown while another gathers steam. As consumers park themselves on the couch instead of getting behind the wheel, the parks might suffer, but maybe channels such as the Disney Channel and ESPN might benefit.

That could help the media ETF and others that count Disney as a component:

• PowerShares Dynamic Leisure & Entertainment (PEJ): Disney is 5.3%; down 3% year-to-date
• PowerShares Dynamic Media (PBS): Disney is 5.4%; down 2.9% year-to-date
• iShares S&P Global Consumer Discretionary (RXI): Disney is 2.7%; down 4.7% year-to-date

Consumer Spending, Earnings Numbers Drive Up Retail ETFs

Retail exchange traded funds (ETFs) are ringing ka-ching in midday trading after some earnings and consumer-related reports.

Consumer spending rose in March, but only because there wasn't much choice. Soaring prices for gas, food and everyday necessities meant bigger totals at the register. Spending rose 0.4%, almost double what economists were forecasting, reports Martin Crutsinger for the Associated Press.

CVS Caremark (CVS) reported its first-quarter earnings that were in line with analysts' expectations, reports Christie Rizk for Thomson Financial. Same-store sales rose 3.9% from a year earlier. Perhaps sales growth owes much to spending on the necessities the drugstore chain keeps in stock.

Home Depot (HD), on the other hand, announced that it's closing 15 stores and pulling back on 50 new store openings, reports Mary Ellen Lloyd for Dow Jones Newswires. The moves are part of Home Depot's efforts to mount a turnaround that includes improving customer service, in the hopes that when a rebound occurs it will be in a position to take advantage. Shares were up midday.

ETFs that count CVS and Home Depot and major holdings were up higher midday, too:

• Retail HOLDRs (RTH): CVS 6.3%; Home Depot 11.8%; up 3.4% year-to-date
• SPDR S&P Retail (XRT): CVS 2.0%; down 1.5% year-to-date
• Vanguard Consumer Staples (VDC): CVS 4.2%; down 3% year-to-date

For full disclosure, some of Tom Lydon's clients own shares of RTH.

Could Consumer Staple ETFs Be a Portfolio Staple?

Consumers who are worried or skeptical about the economy may want to turn to exchange traded funds (ETFs) holding stock of companies that supply household necessities.

Consumer staples include toothpaste, detergent, toilet paper and batteries. In other words, products we can't live without. Consumer staples typically have a consistent demand, and are considered defensive investment with lower portfolio risk. No matter how tight money is, you are not likely to skimp on this stuff when money is low, much less go without it.

Could these funds benefit from those rebate checks going out? Possibly - the rising price of fuel is cutting into the funds available for these necessities. Consumers may see the extra money as an opportunity to stock up.

The St. Louis Post-Dispatch says that the best reason to invest in this sector now is if you think the economy will worsen. Keep in mind these ETFs are down for the year, yet above their 200-day moving average. The household names, such as Procter and Gamble (PG), are relied upon and are also becoming more global in their reach.

Among the ETFs that grant access to this sector are:

• Consumer Staples Select SPDR (XLP): PG 17.1%; down 1.9% year-to-date
• Vanguard Consumer Staples (VDC): PG 14.4%; down 2.6% year-to-date
• iShares S&P Global Consumer Staples (KXI): PG 9.2%; down 3.2% year-to-date
• First Trust Consumer Staples AlphaDex (FXG): PG 4.4%; down 4.9% year-to-date
• PowerShares Dynamic Consumer Staples (PSL): down 1.3% year-to-date
• Rydex S&P Equal Weight Consumer Staples (RHS): down 4.1% year-to-date

Read the disclosure, as Tom Lydon is a board member of Rydex Funds.

Agriculture, Energy ETFs Soar, But Consumers Lose Confidence

Soaring prices for the basic necessities might be helping your agriculture and energy exchange traded funds (ETFs), but the trade-off is beaten-down consumer confidence.

A research group reported today that consumer sentiment has dropped to a five-year low in its fourth consecutive drop. Wall Street economists had been expecting low numbers, reports Anne D'Innocenzio for the Associated Press. Its previous weakest point was in March 2003, just before the U.S. invasion of Iraq.

Deteriorating confidence is a sign that consumer spending may weaken, which would in turn further hurt the economy. Consumers remain worried about inflation and the toll that rising food and gas prices could take on their wallets. The employment picture looks bleak, as well: the Labor Department is expected to show another loss of 65,000 when its April report is released on Friday.

The director of the Conference Board Consumer Research Center also noted that the number of survey respondents who planned to take a vacation in the next six months has fallen to a 30-year low.

Looks like you'll have to rely on Calgon to take you away instead.

Your Rebate Check Could Stimulate ETFs

Will exchange traded funds (ETFs) find the stimulus package stimulating?

Tax rebates will start going out today, even earlier than reported, in the hopes that they will inject a shot in the arm into our stumbling economy. Since consumer spending is 70% of the economy, the hope had been that we'll spend, spend, spend.

But President Bush says the checks will help offset the high gas and food prices that have been weighing down our wallets this year, reports Tom Raum for the Associated Press. It's a change from previous statements that the package is intended to ignite consumer spending.

In total, the Treasury will distribute more than $110 billion to 130 million taxpayers, says Catherine Clifford for CNN Money.

Depending on how you decide to use that extra cash, some ETFs could benefit.

If you use it at the grocery store, maybe an agriculture ETF such as the PowerShares DB Agriculture (DBA) or the ELEMENTS MLCX Grains Index (GRU) could reap the rewards.

Maybe if you decide to hit the mall, the Retail HOLDRs (RTH) or the SPDR S&P Retail (XRT) will get a lift.

Or if you just want to fill up your car, a trip to the pump could lift United States Oil (USO) or United States Gasoline (UGA).

How will you spend or save your rebate check?

For full disclosure, some of Tom Lydon's clients own RTH.

Stocks, ETFs Down on Consumer Confidence Numbers and Microsoft/Yahoo Battle

Some exchange traded funds (ETFs) headed lower this morning after consumer sentiment dropped to its lowest point in nearly 26 years. Technology ETFs weren't helped by Microsoft's disappointing earnings forecast.

The Reuters/University of Michigan consumer sentiment index read 62.6 for April, a 9.9% drop from a month ago. It's the lowest reading since the 1980s, reports Tim Paradis for the Associated Press. Consumer spending is about 70% of U.S. economic activity, so Wall Street is worried.

Microsoft (MSFT) announced earnings that were in line with expectations, but it also faced comparisons with a rosier picture one year ago. The company said that for its fourth quarter, sales would be between $15.5 billion and $15.8 billion, CNNMoney says. Analysts are predicting $15.6 billion. Investors seemed mostly unimpressed by it all, though.

The deadline for Yahoo (YHOO) to accept Microsoft's takeover offer is tomorrow. If no agreement is reached, Microsoft will consider its next step.

• iShares Dow Jones U.S. Technology (IYW): down 8% year-to-date; Microsoft is 12.4%; Yahoo is 1.9%
• Technology Select Sector SPDR (XLK): down 8.9% year-to-date; Microsoft is 10%; Yahoo is 1.7%

Apple, Amazon Come Out With Earnings Numbers; Could Tech ETFs Hop?

Two highly anticipated earnings reports came out after the market close, and the good news could lift related exchange traded funds (ETFs).

First, Amazon.com (AMZN) came out with its numbers. The web retailer says its first-quarter profit rose 29%, beating expectations on Wall Street. The numbers were helped by overseas sales, reports the Associated Press. The numbers are up 31% from one year ago.

Apple (AAPL) also blasted through expectations with its numbers, announcing earnings of $1.16 a share, reports CNBC. Analysts had been expecting $1.07 a share. The stock was trading nearly 4% higher in after-hours tradings.

This news follows Yahoo's (YHOO) positive numbers from yesterday, and Google's (GOOG) strong earnings report from last week. Microsoft (MSFT) is going to report its earnings tomorrow after the closing bell.

 

The technology sector could be something to watch tomorrow.

Amazon and Apple are major components of several ETFs, including:

• Retail HOLDRs (RTH): Amazon is 5%; up 1% year-to-date
• Internet HOLDRs (HHH): Amazon is 21.7%; down 3% year-to-date
• Technology Select Sector SPDR (XLK): Apple is 5%, down 10.5% year-to-date
• iShares Dow Jones US Technology (IYW): Apple is 6.6%, down 10.3% year-to-date

ETFs Aren't Lovin' Good Earnings Numbers from McDonalds, AT&T

Despite positive numbers from both AT&T (T) and McDonald's (MCD), the exchange traded funds (ETFs) that count them as major components seem to be unmoved by the news.

AT&T reported that its first quarter profit was up 22%, mostly because of strong wireless growth, reports Peter Svensson for the Associated Press. Its wireless division added a net 1.3 million subscribers in the quarter.

While AT&T is trading higher midday, ETFs holding the company aren't so far:

• iShares Dow Jones US Telecommunications (IYZ): AT&T is 23.3%, down 18.8% year-to-date
• iShares S&P Global Telecommunications (IXP): AT&T is 17%, down 10.3% year-to-date
• Technology Select Sector SPDR (XLK): AT&T is 9.6%, down 10% year-to-date

Meanwhile, McDonald's also reported first-quarter profit growth of 24% based on strong international sales. Between January and March, it earned 81 cents per share compared with 62 cents per share during the same period last year. Those numbers blew the forecast of 70 cents per share clear out of the water.

The PowerShares Dynamic Food and Beverage (PBJ) fund was slightly lower midday, though. McDonald's is 4.9% of the fund, which is down 1.4% year-to-date. The fast food company is also 5% of the PowerShares Dynamic Leisure & Entertainment (PEJ), which is down 6.6% year-to-date.

Rising Prices Hit Everything from Wallets to ETFs

We know you're going to be shocked - shocked! - to hear this: consumer prices rose last month, no doubt weighing on consumer exchange traded funds (ETFs).

The Labor Department says prices rose 0.3% in March, following an unchanged February. Core inflation, excluding food and energy, rose 0.2%. Both numbers were what analysts had been expecting, reports Martin Crutsinger for the Associated Press.

In the last 12 months, inflation has shot up 4%. Energy costs are up 17% and food is up 4.4%. Last month, airline prices rose 3% last month. Surely you've noticed.

The good news: got your eye on that spiffy outfit in the window? It might be time to buy it if you have any leftover cash. Clothing prices experienced their biggest drop in nearly a decade: 1.3%. It was the biggest one-month drop since September 1998.

Consumer-related ETFs bear the brunt of much of these price hikes, though they're up slightly midday. As those necessary goods such as food and gas become more costly, there's not much left over for frivolous spending.

• iShares Dow Jones US Consumer Goods (IYK), down 5.5% year-to-date
• Consumer Discretionary SPDR (XLY), down 6.3% year-to-date

Retail Numbers Rise, ETFs Yawn

Retail numbers were up slightly in March, which gave mixed results to related exchange traded funds (ETFs), but it's not what you think.

The 0.2% gain in sales primarily is the result of the higher cost of gas. Retail sales would have been flat, had it not been for a big 1.1% jump in sales at gas stations, reports Martin Crutsinger for the Associated Press. Grocery store sales also were up 0.3%, thanks to the higher cost of food.

The good news is that analysts had been expecting a 0.1% increase. The report follows last week's news that many retailers experienced sluggish sales last month. Only Wal-Mart (WMT) and Costco (COST) reported some gains, a sign that shoppers are turning into bargain-hunters and limiting themselves largely to necessities.

Otherwise, consumers still were shying away from the malls and confidence plunged to its lowest reading in 26 years earlier this month.

The Commerce Department has also reported that inventories held by businesses rose by 0.6% in February, which adds to a 0.9% rise reported in January. Translation? People aren't buying.

Retail ETFs seemed to be saying "meh" to the news, midday:

• Retail HOLDRs (RTH), down 1.5% year-to-date
• SPDR S&P Retail (XRT), down 7.4% year-to-date
• Consumer Discretionary SPDR (XLY), down 5.7% year-to-date

For full disclosure, some of Tom Lydon's clients own shares of RTH.

Switzerland and ETF Could Be On the Mend, But More Woes Predicted

Switzerland recently got socked by the global credit crunch, but the country and its exchange traded fund (ETF) seem to be in recovery mode.

The Swiss bank UBS (UBS) had write-downs in the billions last week. Around the same time, mutual funds investing in the country began experiencing inflows. Year-to-date, those funds have reported $2.4 billion in inflows, the bulk of which took place last week, reports Trang Ho for Investor's Business Daily.

It's a turnaround from last year, when those funds experienced $280 million in outflows.

iShares MSCI Switzerland (EWL) has gained 1% during the past year. Year-to-date, it's down 0.6%, but in the last month, it's moved up 2.9%.

One economist predicts more reports of losses and more financial turmoil through the end of the second quarter.

The financial sector accounts for 15% of the Swiss gross domestic product (GDP), and it could make or break the overall economy. The financial sector in the ETF is the third heaviest weighting at 22.6%. The top two are healthcare (30.4%) and consumer goods (25.5%).

UBS is the third-largest holding in the fund, as well, with 5.6% of the assets. The other two holdings have a bigger share of the assets: Nestle has 18.3% and Roche Holding has 14.1%.

Wal-Mart Supplier ETF: A Haven In a Recession?

Wal-Mart (WMT) seems to so far be benefiting from the tough economy, so how is the Wal-Mart supplier exchange traded fund (ETF) doing?

Yesterday's retail report, which delivered the weakest numbers in 13 years, did have good news for discount retailers. Both Wal-Mart and Costco (COST) reported higher sales compared to those of the previous March.

Richard Widows for The Street says an interesting fund opportunity exists for believers that could provide a refuge during uncertain economic times.

FocusShares ISE-Revere Wal-Mart Supplier Index ETF (WSI) tracks an index of Wal-Mart suppliers that derive a significant portion of their revenue from the store. It's got a number of very eclectic holdings, including  Mattel (MAT), General Mills (GIS) and Clorox (CLX). Kellogg (K) is the top holding, with 6.3% of assets.

Bear in mind that the retail giant has a tendency to squeeze every possible percentage point from its suppliers' margins. It's up to the investor to ascertain whether the possibility of maintenance of sales volume by suppliers is worth the risk that Wal-Mart could squeeze profits.

Wal-Mart and Costco are components of other ETFs:

• Retail HOLDRs (RTH): Costco, 5.5%; Wal-Mart, 19.8%
• SPDR S&P Retail (XRT): Wal-Mart, 2%

For full disclosure, some of Tom Lydon's clients own shares of RTH.

Retail Sales Drop In March; ETFs Up Midday

The retail sales picture didn't change much last month, but exchange traded fund (ETF) investors don't appear to be so discouraged.

Despite retailers reporting the weakest March sales in 13 years, retail ETFs were up more than 2% midday. The usual suspects contributed to slow sales: slumping economy and high food and energy prices, reports Anne D'Innocenzio for the Associated Press.

As evidence that consumers were sticking to the necessities and looking for bargains - Wal-Mart (WMT) and Costco (COST) were the strongest performers.

Sales dropped by 0.5%, instead of the estimated 1% growth.

Retail ETFs have been moving higher today:

• SPDR S&P Retail (XRT)
• Retail HOLDRs (RTH): Wal-Mart is 18.3%; Costco is 5.9%
• Consumer Discretionary SPDR (XLY)

For full disclosure, some of Tom Lydon's clients own RTH.

Tom Lydon Talks ETFs on Fox Business

Tom Lydon appeared on Fox Business Network earlier today with anchor Cheryl Casone. Tom discussed hot ETFs in Asia and Latin America as well as poorly performing ETFs in the retail sector. Video of Tom's segment appears below:

Best Buy Posts Lower Earnings, Retail ETFs Take It Well

Best Buy Co. Inc. (BBY) announced that its fourth-quarter earnings fell 3%, but the news so far doesn't appear to be hurting the retail exchange traded fund (ETF) too much.

The company still managed to beat Wall Street's expectations, reports Joshua Freed for the Associated Press, and its shares rose in midday trading. Best Buy's CFO says they're planning for a "soft consumer environment in the near-term." The Retail HOLDRs (RTH) were up slightly in trading today.

On Tuesday the retail sector started the second quarter off on a high note, sending related ETFs higher. A decline in commodity prices, along with better-than-anticipated economic data gave the S&P Retail index a 5.8% jump, reports Andria Cheng for MarketWatch.

The dollar gained strength and shares of oil and gold weakened. Soaring commodity prices were the main reason retailers were suffering, as the sector has lost 20% in the past year. Although there was a rally, retail shares may still continue to be a casualty of closed wallets as energy prices remain high.

RTH closed trading yesterday up 4.1%; SPDR S&P Retail (XRT) finished up 4.6%. Today, both funds showed minimal movement.

For full disclosure, some of Tom Lydon's clients own shares of RTH.

New Quarter, New Start for Some ETFs

Financial, homebuilder and retail exchange traded funds (ETFs) were among the biggest winners on a day when the Dow Jones industrial average rose nearly 400 points.

Although Swiss bank UBS (UBS) and Deutsche Bank (DB) announced write-downs in the billions, UBS issued new shares to help lift their balance sheets. With that, investors seemed willing to make some bets that the worst of the damage from the credit crisis is behind them, says Joe Bel Bruno for the Associated Press.

Another boost of confidence came from the Institute for Supply Management, which said its March index of national manufacturing activity rose to 48.6. The number indicates a contraction, albeit a slower one than in February. Construction spending numbers also were better than expected.

The top unleveraged ETFs today were:

• First Trust Consumer Staples Alpha DEX Fund (FXG), up 13.2%
• PowerShares Dynamic Retail Portfolio (PMR), up 8.4%
• iShares Dow Jones U.S. Broker-Dealers (IAI), up 8.1%
• SPDR S&P Homebuilders (XHB), up 8%
• iShares Dow Jones U.S. Financial Services Index Fund (IYG), up 7.8%

For full disclosure, some of Tom Lydon's clients own shares of XHB.

Retail ETFs Are Shopping For Consumers

Retail exchange traded funds (ETFs) posted some losses this week. Where have all the shoppers gone?

Retailer J.C. Penny (JCP) had a lowered outlook, reports Tomi Kilgore for Thomson Financial, with a bitter sentiment toward the sector. So far this week, it's down 14.8%. The company is 2% of the SPDR S&P Retail (XRT), which is down 5.6% this week.

The Consumer Discretionary SPDR (XLY) is down 5.5% this week. Retail HOLDRs (RTH) is down 2.1% for the week.

Consumers' confidence has been hurt by a credit crunch, job cuts, rising energy prices, all of which resulted in the weakest spending performance in 17 months, ended February, reports Martin Crutsinger for Forbes. The Commerce Department said today that spending rose by just 0.1% last month.

The weakness of consumer spending is the number-one sign a recession may be under way, says one analyst. Although the Federal government has stepped in by cutting rates, some say it is too late to avoid at least a mild downturn.

For full disclosure, Tom Lydon's clients own shares of RTH.

ETF Tracking Error Is Sometimes a Necessary Evil

Logically, exchange traded funds (ETFs) should have minimal tracking error. That's because they track an index, and in theory, if the index zigs, so does the ETF - and vice versa. It's not always the case, though, and tracking error does occur.

Financial and Real Estate Numbers Keep Markets, ETFs Busy

A flurry of activity and reports on Wall Street today sent exchange traded funds (ETFs) moving in every direction.

Financials took a hit on the news that Merrill Lynch & Co. Inc. (MER) had its earnings forecasts cut by JPMorgan Chase (JPM) and UBS AG, reports Kevin Plumberg for Reuters. Then Merrill turned around and downgraded Bank of America (BAC), PNC Financial (PNC) and SunTrust Banks (STI), saying that the collapse of the housing market will continue to hurt lending and home equity.

Financial ETFs are down slightly intraday:

• Regional Bank HOLDRs (RKH): JPMorgan Chase, 14.7%; Bank of America, 9.1%; PNC, 4.5%; SunTrust, 4.3%
• Financial Select Sector SPDR (XLF): Bank of America, 8.8%; JPMorgan Chase, 6.8%; Merrill Lynch, 2.1%; PNC, 1.1%; SunTrust, 1%
• iShares Dow Jones US Financial Services (IYG): Bank of America, 11.9%; JPMorgan Chase, 9.1%; Merrill Lynch, 2.7%; PNC, 1.4%; SunTrust, 1.4%.

The Conference Board reported this morning that its Consumer Confidence Index fell to 64.5 this month, from a revised 76.4 in February. The reading is a five-year low, and a far cry from the 73 that had been expected by analysts, reports Joe Bel Bruno for the Associated Press.

It's a strong sign that people are increasingly restricting their spending to the necessities amid fears that we're in a recession - but the decreased spending will only further weaken the economy.

Retail ETFs that could feel the effects of the news:

• SPDR S&P Retail (XRT)
• Retail HOLDRs (RTH)
• Consumer Discretionary SPDR (XLY)

Home prices also fell by record levels in January, by 10.7%, says Vinnee Tong for the Associated Press. It was the biggest decline in the Case-Shiller home price index's two-decade history. Spring is typically a strong sales time, though, and any notable improvements in the market might not be noticed until summer.

The worst-hit cities were Miami and Las Vegas, which were both hit by 19.3% drops. One economist says a pattern of improvement probably won't be seen until April, at the earliest.

This downbeat news comes on the heels of yesterday's positive news that existing home sales in the United States posted a surprise jump of 2%.

All these numbers have sent the price of oil gyrating as investors have begun selling on worries about the economy, while others are buying on news of the dollar's continued decline. Mercifully, the price of gas and diesel have pulled back some from their recent records, reports John Wilen for the Associated Press.

But analysts are saying that investors should continue to see choppy waters for oil as disagreement about the direction of the commodity persists. As the price see-saws, look for changes in these ETFs:

• United States Oil (USO)
• United States Natural Gas (UNG)
• iShares Dow Jones US Oil & Gas Exploration (IEO)
  

For full disclosure, some of Tom Lydon's clients own shares of RTH.

Transportation ETF Thinks It Can, It Thinks It Can

The transportation exchange traded fund (ETF) appears to be chugging along, and some are taking the movements as a good sign for the rest of the economy.

Gary Gordon for ETF Expert believes this sector is a key barometer for a stock recovery. Dow theorists use it to decipher the trends of bulls and bears. Transporting goods from one place to another is a fundamental driver for the economy, making Dow Jones Transportation Index Fund (IYT) a key ETF to watch.

Gordon points out that while the media has been focused on the financial and consumer sectors, transportation has quietly been delivering the goods. Year to date, it's up 7.5%. In the last week, it's up 9.3%.

When the damage to our economy finally begins to repair itself, the losers of 2007 (financials, consumer discretionary and transportation) will lead in the recovery efforts.

Tiffany's Good News Eases the Mean Reds In Retail ETFs

Jewelry purveyor Tiffany & Co. (TIF) put up strong results on Monday, delivering a dose of positivity to retail exchange traded funds (ETFs) and the overall sector. It's was sitting at 7-week highs this morning.

While Tiffany isn't a major holding of any of the retail ETFs, the fact that the company is forecasting earnings to beat analysts' predictions is good news for the sector - diamonds are hardly a consumer staple, despite what the woman in your life tells you.

Tiffany also reported that its fourth-quarter fiscal earnings beat the mean estimate by analysts, says Tomi Kilgore for Thomson Financial.

Retail ETFs that were in green territory intraday:

• Claymore/Robb Report Global Luxury (ROB)
• Retail HOLDRs (RTH)
• SPDR S&P Retail (XRT)
• Consumer Discretionary SPDR (XLY)
• iShares Dow Jones US Consumer Goods (IYK)

Easter Baskets Of ETFs

While you are egg-hunting today, your mind may not be on your exchange traded funds (ETFs). However, you may want to consider how your nest eggs are doing at his point in time. ETFs have yet to break into the 401(k) area of the market completely, so by investing in a broad-based ETF, you could have your bases covered for the long term until something within the retirement industry gives.

ETFs are baskets of stocks that represent a certain sector of the market. For the widest variety of stocks there are plenty of choices, one example being Diamonds Trust Series 1 (DIA). The stocks range from Johnson & Johnson (JNJ) to Boeing Co. (BA), giving your basket the most variety.

And as you enjoy all of those chocolate eggs and bunnies, are you really thinking about exchange traded funds (ETFs)? While every household is likely to consume at least one chocolate bunny, the PowerShares Dynamic Food and Beverage (PBJ) may get a sugar rush, too.

Holdings range from Yum Brands (YUM) to Anheuser Busch (BUD) giving Easter dinner with Auntie and Uncle a chance to kick in, too.

Happy Easter and may you find lots of eggs!

Retail ETFs Jump As Investors, Like Shoppers, Look for Bargains

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

Prices Up, Home Construction Down, But ETFs Don't Get the Memo

If you were just going by the performance of certain exchange traded funds (ETFs) in intraday trading, you wouldn't think some bad news about the housing and retail sectors had just come out.

First, wholesale prices rose again last month, by 0.3%. Outside of food and energy, prices rose at their fastest pace in 15 months with the rise in inflation at a "troubling" 0.5%.

The inflation numbers are a signal that the soaring energy costs are starting to affect other areas of the economy. Prescription drug prices rose by 1.3%, and cars and light trucks didn't get any cheaper, says Martin Crutsinger for the Associated Press.

Certain retail and consumer-spending ETFs were up between 2% and 3% in intraday trading. Perhaps the funds are reflecting the overall optimism in the market ahead of the Federal Reserve's rate cut late this morning.

• Retail HOLDRs (RTH), down 7.7% year-to-date
• SPDR S&P Retail (XRT), down 11.1% year-to-date
• Consumer Discretionary SPDR (XLY), down 9.4% year-to-date
• iShares Dow Jones US Consumer Goods (IYK), down 8.9% year-to-date

The news wasn't much better for the homebuilding sector: new home construction fell by 0.6% . Wall Street had predicted a 0.2% decline. Building permits, considered an indicator of future activity, fell by 7.8% to its slowest pace in 16 years.  The homebuilders ETFs were up nearly 9% intraday.

• iShares Dow Jones US Home Construction (ITB), down 2.9% year-to-date 
• SPDR S&P Homebuilders (XHB), up 0.2% year-to-date

Consumer Spending Drops In February, Dragging ETFs