The average technology fund we track, excluding the funds that short the sector, climbed 3.85% this week as the media consolidation of Internet stocks continues.
The biggest news in this area is the
CBS (CBS) purchase of
CNET Networks (CNET) for about $1.8 billion. The
ProFunds Internet UltraSector (INPIX) was prepositioned to benefit from the 48.18% skyrocketing of CNET shares.
The
B2B Internet HOLDRs Trust (BHH), which does not replace companies in its portfolio once they are no longer traded, is down to just two holdings.
However, since the fund is 85.2%
Ariba (ARBA) and 14.8%
Internet Capital Group (ICGE), and those shares rose 14.40% and 4.47% in the five trading days ending Thursday, May 15, this fund tops our best-performing list.
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The second-place fund,
Internet Infrastructure HOLDRs (IIH), is down to just eight holdings. At 59.1% of assets,
VeriSign (VRSN) dominates the short list of holdings. VeriSign shares gained 11.02% as the company announced the milestone of one million active secure sockets layer certificates that provide security to the Web sites of most of the Fortune 500 and the 40 largest banks worldwide.
The fund's third-largest holding,
RealNetworks (RNWK), had an even better week, rising 15.9% on news of an impending spinoff of its games division and higher forecasted sales.
Rated E-, the generally poor-performing
ProFunds Mobile Telecommunications UltraSector (WCPIX) bounced back by 11.66% for the period under review. Its holding of
Leap Wireless (LEAP) jumped 19.82% on smaller losses than the prior year and the addition of 230,000 new customers this quarter. Up a 17.04%, some
Telephone & Data Systems (TDS) shareholders were shocked to learn that the company had rejected a buyout bid estimated at $97 a share, well above Thursday's close of $47.81. Clearly, insiders believe the company is worth more.
| Best-Performing Technology Funds for the Week Ending Thursday May 15 |
| Fund | Ticker | Rating | Fund Type | 1 Week Total Return |
| B2B Internet HOLDRs Trust | BHH | E- | ETF | 13.01% |
| Internet Infrastructure HOLDRs Trust | IIH | C+ | ETF | 11.83% |
| ProFunds Mobile Telecom UltraSector ProFund | WCPIX | E- | Open-End | 11.66% |
| Ultra Semiconductor ProShares | USD | E- | ETF | 11.65% |
| ProFunds Internet UltraSector ProFund | INPIX | D | Open-End | 9.72% |
| ProFunds Semiconductor UltraSector ProFund | SMPIX | E- | Open-End | 8.87% |
| Ultra Technology ProShares | ROM | E- | ETF | 7.26% |
| Munder Internet Fund | MNNAX | D- | Open-End | 6.27% |
| Ultra Telecommunications ProShares | LTL | U | ETF | 6.25% |
| First Trust Dow Jones Internet Index Fund | FDN | E+ | ETF | 6.19% |
| Powershares Dynamic Networking Portfolio | PXQ | E- | ETF | 5.57% |
| Source: Bloomberg & TheStreet.com Ratings |
On the downside, taking the worst of the beating this week are the two funds shorting their respective Dow Jones indices with 200% leverage. The
UltraShort Semiconductor ProShares (SSG) lost 11.11%, while the
UltraShort Technology ProShares (REW) gave up 6.71%.
Of the semiconductor index members, the best performer was
RF Micro Devices (RFMD), which predicted a return to profitability next quarter.
The technology index member gaining the most this week was
Electronic Data Systems (EDS), up 27.98% upon agreeing to be bought by
Hewlett-Packard (HPQ) for nearly $14 billion.
| Worst-Performing Technology Funds for the Week Ending Thursday May 15 |
| Fund | Ticker | Rating | Fund Type | 1 Week Total Return |
| UltraShort Semiconductors ProShares | SSG | A | ETF | -11.11% |
| UltraShort Technology ProShares | REW | C | ETF | -6.71% |
| Kinetics Internet Emerging Growth Fund | WWWEX | D- | Open-End | -0.22% |
| Kinetics Internet Fund | WWWFX | B- | Open-End | 0.31% |
| Fidelity Select Telecommunications Portfolio | FSTCX | D- | Open-End | 0.85% |
| Fidelity Advisor Telecommunications Fund | FTUAX | D | Open-End | 0.85% |
| Forward Emerald Opportunities Fund | HSYTX | U | Open-End | 1.44% |
| Powershares Dynamic Media Portfolio | PBS | E+ | ETF | 1.78% |
| Franklin Dynatech Fund | FKDNX | C | Open-End | 1.78% |
| Hartford Global Communications Fund/The | HGCAX | A | Open-End | 1.87% |
| Source: Bloomberg & TheStreet.com Ratings |
Both the
Dow Jones Industrial Average and the
S&P 500 Index have now gained back almost exactly 50% of their declines from their October 2007 highs, breaking through their downtrend resistance lines. Market strength over the next few weeks is crucial to determining if we are going to test the highs or the lows.
The tech-heavy Nasdaq 100 Index consolidated its advance at the 50% level earlier this month. In a bullish sign, this index moved up to the next Fibonacci retracement level of 61.8% this week.
For an explanation of our ratings,
click here.
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