Skip to main content

Investors last week shifted money from money market funds and U.S. Treasuries to technology stocks as some companies' fourth-quarter earnings beat expectations.

The average technology fund we track gained 2.5% in the five trading days ending Feb. 5, excluding inverse funds that sell short technology and Internet stocks.

Amazon.com

(AMZN) - Get Amazon.com Inc. Report

, which surged 26.4% in the five trading days, had its best holiday season ever. In the latest quarter, the company increased net income by 8.7% to $225 million from a year earlier on $6.7 billion in sales, up 18%.

Adding to its sales of digital music and videos, Amazon.com has expanded its offerings to include a library of more than 600 casual games at a sub-$10 price point. The company also will begin collecting payment-processing fees on its Amazon Flexible Payments Service in June.

At 34.4% of assets, Amazon.com is the largest holding of

Internet HOLDRs Trust

(HHH)

, the best-performing technology fund, gaining 11.7% last week.

Yahoo!

(YHOO)

, the fund's second-biggest holding, rose 15.1% after it announced it was shutting its "Briefcase" storage service.

eBay

(EBAY) - Get eBay Inc. Report

, up 7.8% for the period, integrated its payment-processing system with Moneybookers USA.

Scroll to Continue

TheStreet Recommends

Ultra Semiconductor ProShares

(USD) - Get ProShares Ultra Semiconductors Report

, the second-best-performing technology mutual fund, up 11.67% on 200% leverage, and

Semiconductor UltraSector ProFund

(SMPIX) - Get Semiconductor UltraSector ProFund Investor Class Report

, the sixth-best performer, up 10.49% on 150% leverage, track stocks in the Dow Jones U.S. Semiconductor Index.

Standouts among the holdings include

Micron Technology

(MU) - Get Micron Technology Inc. Report

, up 14%;

Nvidia

(NVDA) - Get NVIDIA Corporation Report

, up 13%; and

Texas Instruments

(TXN) - Get Texas Instruments Incorporated Report

, up 12.6%. Judicial proceedings in

Rambus'

(RMBS) - Get Rambus Inc. Report

patent case were halted as the claims were deemed to be "unenforceable" against Micron.

The third-best-performing fund was the

PowerShares NASDAQ Internet Portfolio

(PNQI) - Get PowerShares NASDAQ Internet Portfolio Report

.Its positions include

Art Technology Group

(ARTG)

, which also beat earnings expectations, popping 28.7% last week. Another holding,

Shutterfly

(SFLY) - Get Shutterfly, Inc. Report

, up 24.8%, announced a 10% revenue improvement over the same period. Likewise,

Akamai Technologies

(AKAM) - Get Akamai Technologies Inc. Report

added 24.1% on better-than-expected earnings and revenue.

Skipping past the two inverse exchange-traded funds, the third-worst-performing technology fund last week was the

Mobile Telecommunications UltraSector ProFund

(WCPIX) - Get Communication Services UltraSector ProFund Investor Class Report

, down 3.45%. The fund's largest holding, at 23.4% of assets, is

Sprint Nextel

(S) - Get SentinelOne Inc. Class A Report

, which shed 9.7% of its value. Sprint lost a $73 million California case back in July 2008 on early-termination fees and is under the gun for a similar $1.2 billion class-action suit filed in November.

The culprits in the fourth-worst-performing fund,

PowerShares Dynamic Media Portfolio

(PBS) - Get Invesco Dynamic Media ETF Report

, which was off 3.33% last week, were

Monster Worldwide

(MWW)

, losing 18.6%;

Walt Disney

(DIS) - Get The Walt Disney Company Report

, down 12%;

Comcast

(CMCSA) - Get Comcast Corporation Class A Common Stock Report

, losing 9.8%; and

Time Warner

(TWX)

, off 3.5%.

Monster's own Monster Employment Index, which tracks U.S. online job demand, declined 26% over the past year and bodes poorly for job prospecting in 2009. Monster's fourth-quarter revenue fell 16%. Disney's earnings declined 32% as sales slumped 8% to $9.6 billion, hurt by some consumers looking for cheaper entertainment.

Even if U.S. online retail sales growth, as estimated by Forrester Research, does slow to 11% in 2009 from 13% in 2008, that is still $156 billion in sales and an expectation of double-digit growth while the overall economy contracts.

For more information, check out 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.