Midday Market Update: How Will ETFs React To Stimulus, Improving Numbers?

Retail sales saw a reversal of fortune, if only a bit, and the numbers beat analysts’ expectations. The numbers were also the biggest increase in 14 months. Will this reflect in related exchange traded funds (ETFs) and stocks?

U.S. retail sales in January saw a 1% jump, changing the direction of the downward trend and reversing the trend for over 14 months. Marcy Gordon for the Associated Press reports that higher gas prices, sales and deep discounts added to the success for the month. January reports show a spike in auto sales and general merchandise in stores, namely the big outlet/discount stores such as Wal-Mart (WMT).

• Consumer Staples Select Sector SPDR Fund (XLP): down 7.9% over three months; down 0.6% over one week

Treasury Secretary Timothy Geithner is to meet with the economic team in the White House for a discussion to keep Americans in their homes. The main topic is focused on how to stop the foreclosure bleeding, and how to get credit markets flowing once again.

Maya Jackson Randall for CNN Money reports that a growing number of federal officials are urging banks to hold off on foreclosures until the new administration announces its multi- billion-dollar plan to ease the pain in the housing markets.

Officals from Citigroup (C) and Bank of America (BAC) announced they would hold off foreclosures over the next few weeks until a decision was made by the new administration.

The number of U.S. citizens seeking jobless claims dropped off a bit last week, however, the number of people staying on the benefits rolls after drawing an initial week of aid the week ending Jan. 31 was at the highest on record, according to the Labor Department.

The number of people staying on the benefits rolls rose by 11,000 to 4.810 million in the week ended January 31, the latest week for which data is available, reports the Associated Press.

The revised economic stimulus package awaiting the final votes is set at $789 billion. Final votes are to be out Friday, after making it through the House and Senate, after a round of bargaining that yielded agreement on tax cuts and spending totaling $789 billion, reports Andrew Taylor for the Associated Press.

The $500-per-worker credit for lower- and middle-income taxpayers that Obama outlined during his presidential campaign was scaled back to $400 during bargaining by the Democratic-controlled Congress and White House. Couples would receive $800 instead of $1,000. Critics are skeptical this will do much for overall consumption and would be a very small contribution to the overall economy.