Welcome to Week 27 of the Big Idea Portfolio. A down period for the overall market didn't hurt my portfolio as badly thanks to a sharp rally in Apple (Nasdaq: AAPL ) shares. Yet I'm also still trailing in this three-year contest. More on what's holding back my portfolio, and more tech-stock news, in a minute. First, let's dig into the numbers.
|Riverbed Technology (Nasdaq: RVBD )||$25.95||$14.95||(42.4%)|
|S&P 500 SPDR||$126.50**||$135.49||7.11%|
Source: Yahoo! Finance.
*Tracking began at market close on Jan. 6, 2012.
**Adjusted for dividends and other returns of capital.
The week that was
Bye-bye, big rally. While Friday's sell-off didn't exactly erase the week's gains, overall, July is starting off weak. Only small caps made measurable gains, with the Russell 2000 climbing another 1.08% after last week's 3% up move, while the Dow Jones Industrial Average led the laggards with a 0.84% drop. The S&P 500 fell 0.55%, while Nasdaq eked out a 0.08% gain, CNBC reports.
More than anything else, a sour jobs report knocked the markets off kilter. Non-farm payrolls rose 80,000 in June rather than the 90,000 that economists and analysts were expecting. Combined with weak to middling reports from both April and May, June's numbers raise the possibility of decelerating job growth at a time of stagnating wages. Inflation could take a big bite out of the American economy. Then again, it's also important to remember that these reports come with a generous margin of error, so we could very well be celebrating June's numbers a month from now.
In the meantime, there's also Europe to consider. Trouble in the region has put pressure on currency prices, pushing the euro to $1.23 versus the American dollar -- a two-year low, according to CNBC. In response, a number of financial-services firms have stopped accepting new investors in European money market funds.
Yet banks aren't exactly victims. Regulators are investigating whether a number of the multinationals involved with setting the London Interbank Offered Rate, or LIBOR, deliberately manipulated the rate-setting process for their own benefit. Barclays (NYSE: BCS ) is taking much of the headline heat right now, though at least 17 more institutions could be involved, as my Foolish colleague Matt Koppenheffer reports.
Tech poppers and floppers
Cloud stocks were hit about as badly as banks after multiple stocks turned in lousy guidance, Acme Packet (Nasdaq: APKT ) and Informatica in particular. Both stocks hit new 52-week lows on Friday, with Informatica losing more than 27% of its value.
Yet it was Acme Packet's miss that may have caused more damage. The innovative maker of session border controllers has failed to live up to expectations for several quarters in a row, leading some investors to paint all manner of tech infrastructure stocks red, including Riverbed Technology, which also set a new 52-week low. It looks bad right now, but some of these stocks are being sold off too fast, too soon. Riverbed probably makes that list. I'd say the same for F5 Networks, which once more trades for less than $100 a share.
Finally, after running the numbers, it appears Facebook (Nasdaq: FB ) could be at risk for disappointing investors just as much as Acme Packet and Informatica. In quarters past, declines in unique visitors have come with an equally troubling drop in revenue, and UVs have trended down in both April and May. Analysts are nevertheless expecting top-line growth in the June quarter, so expect a sharp sell-off if Facebook misses the mark.
Do you agree? Which tech stocks do you like now and over the next three years? Please weigh in using the comments box below.
And see you back here next weekend for more tech-stock talk. To get full detail on Apple stock as a long-term opportunity, check out our new premium research report on Apple. In the meantime, remember to check out the Fool's latest special report, "The 3 Dow Stocks Dividend Investors Need," and add the Big Idea portfolio stocks to your Foolish Watchlist for ongoing, up-to-the-minute coverage. Both the report and the Watchlist as 100% free to Fools:
- Add Apple to My Watchlist.
- Add Google to My Watchlist.
- Add Rackspace Hosting to My Watchlist.
- Add Riverbed Technology to My Watchlist.
- Add salesforce.com to My Watchlist.