Stock exchange traded funds reversed early losses Thursday while retail ETFs gained ground after store operator Kroger (NYSE: KR) reported better-than-expected quarterly results.

Kroger shares rallied 4%. “Overall, first-quarter results looked solid, as rising food inflation appears to be getting passed through [to consumers],” Deutsche Bank analysts said in a note Thursday. They have a buy rating on the stock, citing Kroger’s “attractive valuation and accelerating sales.”

The shares are held in sector ETFs such as PowerShares Dynamic Retail (NYSEArca: PMR), Retail HOLDRS (AMEX: RTH), Rydex S&P Equal Weight Consumer Staples (NYSEArca: RHS) and SPDR S&P Retail ETF (NYSEArca: XRT).

In other sector ETFs, homebuilder funds rose Thursday after a report showing housing starts climbed in May, while Pier One (NYSE: PIR) was also out with quarterly earnings. [Homebuilder ETFs Higher]

Equity ETFs swung positive after earlier losses Thursday. [ETFs Point to More Risk-Off Trade]

In industry news, exchange traded funds from Vanguard and BlackRock dominate the list of top 20 ETFs by total distribution in the 401(k) and defined contribution business, according to a report this week. [ETFs in Retirement Plans]

PowerShares Dynamic Retail

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.