Retail exchange traded funds got a boost Monday from JC Penney (NYSE: JCP), which saw its shares rise 5% after the company reported upbeat quarterly results. Sector bellwether Wal-Mart (NYSE: WMT) will report first-quarter earnings on Tuesday.

Analysts are calling for a 1% drop in revenue, compared to last year, as higher gas prices may be causing Wal-Mart shoppers to close their wallets. The company is up against strong competition from online retailers such as Amazon, causing the retail giant to reconfigure ad campaigns and open a chain of smaller “Wal-Mart Express” stores, reports Anne D’Inncenzio for MSNBC.

“A lot of the issues at Wal-Mart are company specific, like taking out products that were important to their core customers,” said Patrick McKeever, retail analyst at MKM Partners. “It will take a while for them to correct that. It does not happen overnight.”

Wal-Mart is considered a bellwether for U.S. economic consumer spending. The company is focusing energy on overseas growth, as it has expanded into over 15 international countries. [Retail ETFs Higher After Kohl’s Results.]

ETFs holding Wal-Mart include:

  • Retail HOLDRS (AMEX: RTH): Wal-Mart is nearly 18% of the portfolio. Retail ETFs have rallied in 2011.
  • SPDR S&P Consumer Staples Select Sector Fund (NYSEArca: XLP): Wal-Mart is 8.5%.

    Retail HOLDRS

    Tisha Guerrero 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.