Investors are pushing consumer discretionary stocks higher despite questions about the outlook for consumer spending.

VCR

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The Vanguard Consumer Discretionary ETF (VCR) is up nearly 14% on the latest leg of the rally which began on February 9.  That compares to just a 9% gain for the broader market over the same time period.

Top VCR holdings include McDonald’sDisney, Home Depot,Comcast and Amazon – all stocks that have done well in recent weeks.

The strength in consumer stocks has come despite a poor consumer confidence report that was released by the Conference Board on February 23.  The report concludes that continued high levels of unemployment and a slow housing market have consumers on the defensive.

On the plus side, retail companies like Home Depot are showing signs of financial strength by reporting better than expected earnings and raising dividends.  Disney shareholders are counting on an eventual bounce back in advertising, consumer spending and theme park attendance while enjoying the benefits of continued streamling efforts on the cost side.

Other funds that focus on consumer discretionary spending include the Consumer Discretionary Select Sector SPDR Fund (XLY) and the PowerShares Dynamic Consumer Discretionary Sector Portfolio (PEZ).

For more ETF investing choices, see the ETF Directory for a complete list of Sector ETFs.