NEW YORK (TheStreet) -- This week has been a big one for the retail sector, with several companies reporting quarterly earnings numbers. Investors can gain exposure to the broad sector with SPDR S&P Retail ETF (XRT) - Get Report.

Tuesday started out with major players such as

Abercrombie & Fitch

(ANF) - Get Report

,

Home Depot

(HD) - Get Report

, and

Wal-Mart

(WMT) - Get Report

all reporting optimistic numbers prior to the market's open.

This morning, investors were greeted to numbers from

Chico's FAS

(CHS) - Get Report

.

Hot Topic

(HOTT)

will step up to the plate after the market closes today with its own earnings numbers and outlook.

ANF is important because it shows the pulse of discretionary spending, while WMT gives markets an idea of how discount retails have fared over the course of the latest quarter.

HD is relevant not only for showing the status of the home-improvement section of the retail sector, but also because the company's results provide the markets with an indication of how the housing sector is faring.

Video: ETF Takes Consumer's Pulse>>

Playing individual companies within the retail arena can be a tricky way to access the industry as whole. Although other companies may react similarly to a peer company in the same sector reporting earnings, the reaction may be limited or even in the opposite direction.

The risks that can come with stock picking across the retail spectrum can be great. Therefore, less aggressive investors may wish to use a sector ETF to temper a play on corporate earnings.

Investors have several ETFs with a focus on the retail sector to choose from, but I like XRT best for its broad exposure. In addition to high-end retailers such as jewelry-maker

Tiffany's

(TIF) - Get Report

, big department stores such as

Macy's

(M) - Get Report

and smaller chain stores catering to a specific type of customer, such as Hot Topic are also represented in the fund.

XRT distributes assets among its 65 holdings in a comparatively egalitarian manner, with even its top holding

Priceline

(PLCN)

accounting for no more than 2.7% of net assets. This allows the fund to avoid the added risks that stem from an overly top heavy portfolio.

In terms of what investors can expect for the future of this fund, Macy's had a better-than-expected report recently in this earnings season. Since this retailer's products cover a broad swath of customer demographics, the report suggests the American consumer is alive and well.

If other reports this week are also positive, XRT should do well in the short term. However, there is always the chance these days that macroeconomic news will overshadow corporate earnings results, a trend that emerged last earnings season and continues during this one as well.

Still, despite the difficult macroeconomic environment which has defined 2010 so far, XRT has managed to outperform the

S&P 500

year to date with gains of about 4%, while the broader U.S. markets are down by about 3%.

Although XRT could be used a short-term play for just this week, I would advise that investors take a more long-term approach with the fund. Even with a slowdown in the economic recovery broadly expected in the media and in the markets at this point, this does by no means suggest that slower recovery and gradually increasing consumption will not occur.

In this case, XRT should be used as a long-term play and vote of confidence on the slow but steady American economic recovery for the road ahead.

-- Written by Don Dion in Williamstown, Mass.

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At the time of publication, Dion Money Management was not long any equities mentioned.

Don Dion is president and founder of

Dion Money Management

, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.