Retail exchange traded funds held steady Friday despite worries over Nordstrom (NYSE: JWN), which reported improved first-quarter profit but scaled back its full-year forecast.

Retail ETFs were flat while Nordstrom shares fell into the red. The stock represents about 5% of PowerShares Dynamic Retail (NYSEArca: PMR). The ETF has rallied about 15% this year. [Kohl’s Leads Retail ETFs to New High]

Some Wall Street analysts are bullish on Nordstrom despite the lower guidance from the operator of high-end department stores.

Sterne Agee analysts said better earnings will be complemented by a revaluation of the stock as Nordstrom catches up with the multiples that investors are assigning to other moderately growing luxury plays on the economy.

“Nordstrom remains one of our favorite stocks in 2011, uniquely positioned for sales acceleration and insulated from massive inflationary pressures likely to beset others,” Sterne Agee said in a note.

PowerShares Dynamic Retail

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