Welcome to Week 28 of the Big Idea Portfolio. This week, I've touched a new low thanks to sell-offs in the shares of Riverbed Technology (Nasdaq: RVBD ) and salesforce.com (NYSE: CRM ) . More on what's holding back my portfolio, and more tech-stock news, in a minute. First, let's dig into the numbers:
|S&P 500 SPDR||$126.50**||$135.75||7.31%|
Source: Yahoo! Finance.
* Tracking began at market close on Jan. 6, 2012.
** Adjusted for dividends and other returns of capital.
The week that was
A rare week of divergence among the major indexes helped Mr. Market extend his lead in our three-year tussle. Both the Dow, up 0.04% for the week, and the S&P 500, up 0.15%, inched higher as the tech heavy Nasdaq fell almost 1%. The small-cap Russell 2000 also fell, ending a two-week winning streak with a 0.76% decline, CNBC reports.
Interestingly, banks were among the week's big winners. Warren Buffett favorite Wells Fargo rose 2.5% on strong growth in its mortgage banking business while shares of JPMorgan Chase (NYSE: JPM ) rallied nearly 6% on better-than-expected earnings results. Apparently, investors aren't too concerned about ballooning European trading losses -- now estimated at roughly $5.8 billion, up from $2 billion in May.
We'll see if that lasts. Profits drive returns, after all, though external forces and perception always play a role in the short term. Monetary policy, too, has a say on returns. The Federal Reserve recently completed a study of the influence of its rate-setting activities and found a startling number of correlations, as my Foolish colleague Morgan Housel reports.
Tech poppers and floppers
Among the innovators, Netflix (Nasdaq: NFLX ) extended a rally as San Diego's annual Comic-Con festival put media and entertainment stocks in the spotlight. Shares of the streaming sensation are up more than 35% over the past month.
Is the enthusiasm warranted? There are plenty of skeptics, to be sure, but as the frenzied crowds at Comic-Con show, there's a hunger for bleeding-edge digital entertainment. Netflix is already streaming Marvel Studios flicks Thor and Captain America: The First Avenger and will get this year's blockbuster, The Avengers, in 2013. Another box-office winner, The Hunger Games, arrives this fall. Chief competitor Hulu in pales by comparison in its selections.
Meanwhile, back in my portfolio, cloud-computing stocks Riverbed and salesforce.com joined in a sectorwide beating after Acme Packet (Nasdaq: APKT ) underperformed expectations in preannouncing second-quarter results last week.
Poor results from one company don't necessarily represent a systemic problem. Yet in selling off Riverbed and Salesforce, investors are behaving as if that exactly what we have here: an industrywide sales rut that could take years to recover from. New data from Gartner is more optimistic.
Who's right? You tell me. Use the comments box below to list your favorite tech stocks over the next three to five years and tell us why you like them.
And see you back here over the weekend for more tech-stock talk. 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 are 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.