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Holiday Sales Help Lift Retail ETFs

With the holiday shopping season underway, retail exchange traded funds are strengthening on retail sales growth despite broader market weakness on concerns of the so-called fiscal cliff.

The  Market Vectors Retail ETF (RTH) was up 0.2% Thursday and has gained 2.9% over the past month. RTH reflects the performance of a modified market capitalization weighted index that tracks the 25 largest, most liquid U.S. retailers, such as Wal-Mart, Amazon, Home Depot and Costco, among others. [Retail ETFs Size Up Holiday Apparel Sales]

According to the Commerce Department, retail and food service sales rose 0.3% over the past month, and year-over-year, November sales expanded 3.7%, the Wall Street Journal reports.

“We’re off to a fairly strong holiday-spending season,” Millan Mulraine, senior U.S. strategist for TD Securities, said in a Bloomberg article. “Consumer spending could offset some of the weakness” in other areas, he added.

Electronics and appliance stores sales rose 2.5% while nonstore retailers, which include online shopping, saw sales advance 3.0%. Moreover, motor vehicle sales and parts was 1.4% higher.

However, gasoline sales dropped 4%, and spending at department, general merchandise and grocery stores also fell.

Some other retail ETFs include:

  • SPDR S&P Retail ETF (XRT)
  • PowerShares Dynamic Retail Portfolio (PMR)

Market Vectors Retail ETF

For more information on the retail sector, visit our retail category.

Max Chen 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.