Retail Sales Lift Sector ETF to All-Time High on Heavy Volume

SPDR S&P Retail (XRT) rallied more than 2% on Tuesday as the sector ETF saw its heaviest trading volume since May 2012 on better-than-expected retail sales.

Over 14 million XRT shares traded Tuesday, compared with a daily average of about 4.3 million over the past three months.

“U.S. retail sales rose a seasonally adjusted 0.5% in December and sales for November and October were revised slightly higher, according to Commerce Department data … The increase was the highest since September,” MarketWatch reported.

“The report suggests that consumers provided an element of support to the economy during December. We should get respectable results on total consumer spending for the fourth quarter of the year,” said Michael Moran, economist at Daiwa Securities America, in a Reuters article.

The rally Tuesday in XRT, the retail ETF, carried the fund close to its all-time high from September 2012. The retail ETF outperformed the broader market in 2012 with a total return of 20.7% versus a 16% gain for the S&P 500, according to Morningstar.

Other retail and consumer discretionary ETFs include Market Vectors Retail (RTH), PowerShares Dynamic Retail (PMR), Vanguard Consumer Discretionary (VCR), iShares Dow Jones U.S. Consumer Services (IYC) and Consumer Discretionary Select Sector SPDR (XLY).

SPDR S&P Retail

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The opinions and forecasts expressed herein are solely those of John Spence, 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.

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