Home Depot’s Builds Something for These ETFs

The consumer discretionary sector has been struggling this year and one of the drags on the group has been Dow component Home Depot (NYSE: HD), which entered Tuesday with a 2014 gain of just 1.9%.

Atlanta-based Home Depot is snapping out of that funk in a big way today with a gain of 6% on volume that is already more than double the daily average. The stock is benefiting from multiple catalysts. Home Depot said its profit in the most recently completed quarter rose to $2.1 billion from $1.8 billion a year earlier as sales jumped 5.7% to $23.8 billion. The company raised its full-year earnings guidance to $4.52 per share, up 10 cents from prior guidance.

Add to that, the Commerce Department said earlier today that housing starts surged 16% in July to an annual rate of 1.093 million units. That is good news for the do-it-yourself retailer and good news for some overlooked ETFs with healthy allocations to the stock. The new is welcome at a time when homebuilder and retail ETFs have been struggling to recapture lost momentum. [Homebuilders ETFs Deal With Tepid Data]

With Home Depot hitting a new all-time high today, the Market Vectors Retail ETF (NYSEArca: RTH) is going along for the ride. RTH is higher by 1.7% on above average volume, making it one of fewer than 50 ETFs to hit new all-time highs to this point in Wednesday’s session.

Home Depot is RTH’s fourth-largest holding with a weight of 7.4%. Rival Lowe’s (NYSE: LOW) follows at a weight of 5.3%. RTH has also benefited from an impressive rebound by Amazon (NasdaqGS: AMZN), which is up 9.2% this month. With Tuesday’s gains, RTH is up 4.3% this month, a performance that is better than triple the gains offered by Wal-Mart (NYSE: WMT), RTH’s largest holding at a weight of almost 10.4%. [Retail ETFs Look for Lost Magic]

An almost 5.2% weight to Home Depot is helping the PowerShares Dynamic Building & Construction Portfolio (NYSEArca: PKB) to the tune of a 1.1% gain.