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Auto, Retail Sales Support ETFs and Stocks

ByWall Street Sector Selector
AuthorJohn Nyaradi
Published 01/05/2012, 03:43 AM
Updated 05/14/2017, 06:45 AM
INDX
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Strong auto and retail sales support U.S. stocks in light trading

Yesterday markets were mostly flat to higher, supported by good news from the auto and retail sales sector.

Major U.S. car makers in the important industrial sector (NYSEARCA:XLI) reported strong yearly sales gains and same store retail sales also advanced to support the vital retail/consumer sector (NYSEARCA:XRT)

In the automotive and transportation world, Ford reported year over year sales increases of 10%, Chrysler was up 26% and General Motors boasted sales gains of 14% to cumulatively post the car industry’s best year since the onset of the global financial crisis.  Furthermore, forward looking projections called for continued healthy sales increases in 2012.

Post holiday retail sales showed strong same store sales with projected increases to be as high as 4% but overall action in the sector was dampened by news that Sears was downgraded to a deeper level of  junk by Moody’s Investor Services.

ETFs that track these sectors generally rose with Industrial Select SPDR (NYSEARCA:XLI) gaining +0.5% on the day, iShares Dow Jones Transportation ETF (NYSEARCA:IYT) climbing 0.3% and the retail sector (NYSEARCA:XRT) declining -0.3% for the day.

Bottom line: The U.S. consumer continues holding up well in spite of significant headwinds in the employment and housing sectors.  The recent, steady stream of economic reports showing improving conditions in the United States should add further support to stock prices going forward into January.

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