Retail Sales Report Puts the Brakes on ETFs

Stocks swung into positive territory by the market close Thursday, though most unleveraged exchange-traded funds were left flat after worse-than-expected July retail sales remained weighed on investors. The Dow Jones Industrial Average closed up 37 at 9399. The Nasdaq ticked up 11 to reach 2009 and the S&P 500 rose 7 to 1013.

Consumer spending, which accounts for two-thirds of GDP, remains softer than expected. The Commerce Department said U.S. retail sales unexpectedly fell 0.1% in July.

Wal-Mart (WMT) beat earnings estimates but said sales in the current quarter would be flat to up 2%, pointing to a weak back-to-school shopping season. Same-store sales in the just-completed quarter declined 1.2%.

The broader drop in July retail sales -- which came despite the debut of the government's "cash for clunkers" program meant to jump-start the auto business and help turn around the economy -- was a huge disappointment on Wall Street.

Also Thursday, the Labor Department said the number of U.S. workers filing new claims for state jobless benefits rose slightly last week, but the small increase is not likely to be viewed as a major setback amid other signs of improved labor market conditions. Initial claims for jobless benefits rose by 4,000 to 558,000 on a seasonally adjusted basis in the week ending Aug. 8, according to the weekly report. The four-week average of new claims, which aims to smooth volatility in the data, rose by 8,500 to 565,000 -- the highest since July 18.

For a detailed rundown on Thursday’s trading session see our market story. 

The SPDR S&P Metals & Mining fund (XME) rose 4.7%, boosted AK Steel (AKS), which reversed layoffs it imposed three months ago. The Oil Service HOLDRS fund (OIH) climbed 3.1% as crude demand climbed slightly.

Another day of seesaw index movement hit the S&P 500 VIX Short-Term Futures Index fund (VXX) Thursday, pushing shares down 2.3%. The Claymore/MAC Global Solar Energy Index fund (TAN) slipped 3.2% on a large loss from LDK Solar (LDK),

Earnings and Conference Calls
Abercrombie & Fitch, Dundee, First Capital Realty, First Data, Hydrogenics, JCPenney, NPC International, Transcept Pharmaceuticals

Economic Data
8:30 a.m. Consumer Price Index
9:15 a.m. Industrial Production
9:55 a.m. Consumer Sentiment