Mid Day Roundup: Markets Drift Higher On Mixed Data

by on June 13, 2012 | ETFs Mentioned:

After yesterday’s brief period of euphoria, markets got their reality check today as poor U.S. data got trading off to a rocky start this morning, reminding investors just how difficult the road to recovery is. U.S. retail sales fell for the second consecutive month by 0.2%, prompting the first string of declines in almost two years. Although retail sales fell less than expected, April data was revised down into negative territory [see also How To Pick The Right ETF Every Time].

The latest slump in consumer retail spending was in part brought on by lower gasoline prices; the national average retail price for gas fell 4 cents a gallon to $3.572, continuing the 10th consecutive weekly decline. Despite relief from painfully high gas prices, consumers are still proceeding with caution, carefully allocating income towards purchases that are more in line with household budget constraints [see also The Central Banks Are Buying Gold Like It's 1965].

On a more positive note, U.S. automobile sales proved to be a bright spot today, as data showed an increase of 0.8% in May. With Americans buying 1,334,600 new vehicles just last month, these automobile ETFs have had some impressive gains thus far in 2012:

  • Global X Auto ETF (VROM): +6.59%
  • First Trust NASDAQ Global Auto Index Fund (CARZ): +4.42%

While investors continue to digest the latest developments on the homefront as well as oversees, markets remain mixed: after this morning’s brief sell off, stocks are now managing to claw their way back, posting only moderate losses on the day at the time of writing. With the Volatility Index (VIX) above the 20 mark, investors should expect more back-and-forth trading today as uncertainty levels remain elevated [see ETF Technical Trading FAQ].

Below we highlight one ETF that has been impacted by today’s major headlines:

State Street SPDR Retail ETF (XRT)

As sour U.S. retail data was released this morning, this ETF gapped lower at the start of the trading session only to slip even lower during early afternoon hours. XRT is down around 0.84% (as of 11:50 AM June 13, 2012). The PowerShares and Market Vectors Retail ETFs, PMR and RTH, are also in red territory for the day.

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Disclosure: No positions at time of writing.