Consumers Go On Debt Spree (XLY, XLP, XLF, BAC)

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Consumers go on debt spree that powers financials and Bank of America to big gains.

November consumer debt rose by $20.4 Billion, the biggest increase in ten years (November, 2001) as reported by the Federal Reserve today.

Debt soared by 10% on an annual basis, far above expectations, as consumers signed up for more credit in every category including credit cards,, cars, student and persona loans.

The consumer sector as represented by SPDR Consumer Discretionary (NYSEARCA:XLY) and SPDR Consumer Staples (NYSEARCA:XLP) was largely flat today while the financial sector (NYSERCA:XLF) jumped 0.4%.  Big gains continue to be seen by Bank of America (NYSE:BAC) which jumped 1.3% today and is up 25% from its mid-December lows.

Bottom line: The consumer accounts for 70% of the U.S. economy and so increased confidence here could bode well for economic growth ahead.

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