Positive news from Bank of America was offset by weak retail sales for November and a surprising drop in economic activity in the services sector, which left stocks and exchange traded funds (ETFs) searching for something to move them strongly in either direction.

Bank stocks were given a boost this morning on news that Bank of America (NYSE: BAC), the nation’s biggest lender, will repay $45 billion of the U.S. government bailout funds. This will help free the bank from curbs on executive pay that have hampered its search for a new CEO, writes David Mildenberg for Bloomberg. BAC is up more than 3% today, while the PowerShares Dynamic Banking ETF (NYSE: PJB) is up about 0.5% today. (For more stories on the financial industry, please our financial category).

There were two pieces of mixed economic data out this morning. Weekly jobless claims fell for the fifth week in a row to 457,000, reported Alan Rappeport for the Financial Times. The closely-watched monthly payroll numbers from the U.S. Labor Department will be issued tomorrow morning at 8:30 EST.

However, unexpected weakness in the service industry stirs worries about the economy’s ability to recover. The Institute for Supply Management (ISM) said its service industry index has fallen to 48.7 in November from 50.6 in October, reports Bob Willis for Bloomberg. Any number below 50 signals a contraction in economic activity. The ISM index is composed of non-manufacturing businesses which make up almost 90% of the U.S. economy.

More negative news came from U.S. retailers. Thanksgiving weekend sales were not strong enough to offset the effects of what was a miserable November for the nation’s retailers. Merchants collectively posted a 0.3% decrease for November, reports Anne D’Innocenzio for the Associated Press.

This decrease was a surprise because the number was in comparison to last November when retail sales plunged 7.7% as shoppers were spooked by the meltdown in the financial markets. This number suggests that the economic recovery is still fragile and that consumers are still under pressure from job worries. The SPDR S&P Retail ETF (NYSE: XRT) is little changed so far today. (For more stories on the retail industry, please visit our retail category).

Tony D’Altorio 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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