Exchange traded funds (ETFs) pointed to a flat opening for Wall Street in early trading today after disappointing data on retail sales and homebuilder sentiment.

  • Shoppers pushed retail sales up for a seventh straight month, although the increase was the weakest since June. The Commerce Department said demand rose at department stores, electronic stores and auto dealerships. Sales are up more than 14% from the recession low hit in December 2008. Still, economists were expecting a bigger gain. January was the first month that Americans had more money in their paychecks because of a Social Security tax cut. SPDR S&P Retail (NYSEArca: XRT) is down slightly this morning, though for the last 10 days it has gained 6.5%.
  • Homebuilders are not seeing a turnaround in the housing market after the worst year for new-home sales in a half-century. The National Association of Home Builders says its index of builder sentiment for February remained unchanged for the fourth straight month at 16. Any reading below 50 indicates negative sentiment about the market. The index hasn’t been above that level since April 2006. Homebuilders are struggling to compete with millions of foreclosures that are forcing home prices down. Last year was also the worst in more than a decade for sales of existing homes. iShares Dow Jones U.S. Home Construction (NYSEArca: ITB) is off slightly at the open.
  • Chinese inflation hit a lower-than-forecast 4.9% in January, but price pressures excluding food were their strongest in at least a decade and will force the central bank to further tighten monetary policy. “The money supply and lending data suggest that government efforts to clamp down on liquidity might be taking hold, though broad-based inflation provides no leeway for the central bank to relax its tightening stance,” said Connie Tse, economist at Forecast PTE in Singapore. Despite that, Market Vectors China (NYSEArca: PEK) is up 2.1% so far this morning, leading all other China-focused ETFs.
  • Deutsche Bourse AG and NYSE Euronext on Tuesday said they plan to merge following approval from their boards in a deal that would create a cross-border exchange giant. The combined company would be 60% owned by Deutsche Boerse shareholders with NYSE Euronext shareholders taking a 40% stake, according to a press release. The iShares MSCI Europe Financials Index (NASDAQ: EUFN) rose almost 1.5% in early trading.

Gregory A. Clay contributed to this article.

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