Fidelity Auto Fund Almost Doubles in Quarter

Who would have thought that a mutual fund focusing on the car industry, littered with bankrupt companies, would be the top performer in the second quarter?

Investors threw in enough cash for clunker stocks to drive the Fidelity Select Automotive Portfolio(FSAVX Quote) 81% higher in the three months ending June 30. Tenneco(TEN Quote) rocketed 550%, ArvinMeritor(ARM Quote) surged 456% and Ford(F Quote) rose 131%. As the weaker players get shaken out of the industry, the survivors are positioned for a return to growth in the fourth quarter and next year.

The U.S. economy isn't out of the woods yet. An unemployment rate of 9.5%, the highest in 26 years, shows just how far off the beaten path we have wandered. With June's average hourly earnings flat from May and up just 2.7% in a year, the smallest annual rise since September 2005, the buying power of Americans remains constrained. ...