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Consumer Discretionary, Retail ETFs Fall on Weak Holiday Sales

Retail and consumer discretionary ETFs were the steepest sector decliners Wednesday on reports U.S. holiday sales were the slowest since 2008.

Consumer Discretionary Select Sector SPDR (XLY) and SPDR S&P Retail ETF (XRT) were both down more than 1% in recent trading.

“In 2012, the shopping season was disrupted by bad weather and consumers’ rising uncertainty about the economy,” the Financial Times reports.

Retail holiday shopping rose o.7% from the year-ago period during the two months leading up to Christmas, well below analyst expectations, according to a MasterCard unit estimate.

Weak sales were blamed on superstorm Sandy and worries over the U.S. fiscal cliff.

“It’s been a challenging holiday season,” said David Jaffe, CEO of Ascena Retail Group, in a report.

Holiday sales are “slightly softer” than last year, he added. “People weren’t in a shopping mood until the end of the season.”

Still, retail and consumer discretionary ETFs have been among the top sector performers in 2012. XLY is up 22.5% year to date, compared with a gain of 15.1% for SPDR S&P 500 (SPY), according to Morningstar. [Retail ETFs Catch a Bid]

The consumer discretionary ETF rose to a lifetime high earlier this month. [Sector Fund at All-Time High on Retail Sales]

Consumer Discretionary Select Sector SPDR


Full disclosure: Tom Lydon’s clients own SPY.

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