In early trading on Friday, exchange traded funds (ETFs) are staying mostly flat as the markets wonder two things: can the Dow turn a three-day rally into a fourth and what kind of news will earnings season bring?

Earnings season officially kicks off on Monday, with perennial first-up earnings after the bell from aluminum maker Alcoa (NYSE: AA). A JP Morgan analyst has lowered his estimate for Alcoa’s earnings because of lower aluminum prices. Analysts overall seem to anticipate a strong earnings season, with profits of S&P 500 companies jumping 34% in 2010. Alcoa, however, will set the early tone. [Dividend ETFs for Stronger Companies.]

  • iShares Dow Jones U.S. Basic Materials (NYSEArca: IYM): Alcoa is 3%

Talk about a mixed signal. Despite sales declining for the first time in more than a year, wholesale inventories rose 0.5%. The drop in sales is a discouraging development, since businesses may not increase their orders, which would ultimately mean lower factory production. Consumer spending remains a real point of concern for the economy. It could also continue to negatively impact retail-focused ETFs, particularly those focused on consumer discretionary items, as shoppers scale back and buy necessities. [Consumer Discretionary ETFs: Outperformance in 2010?]

  • SPDR S&P Retail (NYSEArca: XRT): down 5% in the last month

Retail, Consumer Discretionary

Gold miner ETFs received an early lift in the markets today – Market Vectors Gold Miners (NYSEArca: GDX) is up more than 3%. This is partially on the strength of gold prices, which are back up above $1,200 an ounce, as well as analyst reports on some stocks in the sector. While a few were downgraded, several other companies were the beneficiaries of a positive outlook. [7 Commodity ETFs You Should Know More About.]

Gold Miner ETFs, GDX, Metals, Miners

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.