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
for about $1.8 billion. The
ProFunds Internet UltraSector
was prepositioned to benefit from the 48.18% skyrocketing of CNET shares.
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%
( ARBA) and 14.8%
Internet Capital Group
, 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.
The second-place fund,
Internet Infrastructure HOLDRs
( IIH), is down to just eight holdings. At 59.1% of assets,
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,
, 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
bounced back by 11.66% for the period under review. Its holding of
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
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.
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
lost 11.11%, while the
UltraShort Technology ProShares
gave up 6.71%.
Of the semiconductor index members, the best performer was
RF Micro Devices
, which predicted a return to profitability next quarter.
The technology index member gaining the most this week was
Electronic Data Systems
, up 27.98% upon agreeing to be bought by
for nearly $14 billion.
Dow Jones Industrial Average
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,
Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.