Lucent, Yahoo Whack Tech ETFs
Earnings disappointments by Yahoo and
Lucent sent tech stocks lower Wednesday, and the tradable tech funds followed
suit.
The Internet HOLDR
(
HHH |
Quote |
Chart |
News |
PowerRating) gapped
down and fell 11.4%, the day’s sharpest loss among the exchange-traded
funds. The basket of Internet stocks took a large hit from the
20.9% gap-down move in Yahoo
(
YHOO |
Quote |
Chart |
News |
PowerRating), which holds the second largest
weighting in the basket after America Online
(
AOL |
Quote |
Chart |
News |
PowerRating).Â
Among the Internet HOLDR’s other
components, America Online
(
AOL |
Quote |
Chart |
News |
PowerRating) gave up 4.8%, Amazon.com
(
AMZN |
Quote |
Chart |
News |
PowerRating) 8.6%,
eBay
(
EBAY |
Quote |
Chart |
News |
PowerRating) 8.5%, Inktomi
(
INKT |
Quote |
Chart |
News |
PowerRating) 13.6%.
The Broadband HOLDR
(
BDH |
Quote |
Chart |
News |
PowerRating) gapped
down 8.9%, dragged lower by the 32.3% decline in Lucent Technologies
(
LU |
Quote |
Chart |
News |
PowerRating)
after the company warned earnings would come below Wall Street expectations. For
my take on Lucent and Yahoo’s charts, see my Trading
The News commentary.
The Internet Infrastructure HOLDR
(
IIH |
Quote |
Chart |
News |
PowerRating)
declined 7.3%, the Dow Jones Internet iShares
(
IYV |
Quote |
Chart |
News |
PowerRating) 4.9%, the Telecom HOLDR
(
TTH |
Quote |
Chart |
News |
PowerRating) 4.4%, the Dow Jones Telecommunications iShares
(
IYZ |
Quote |
Chart |
News |
PowerRating) 3.6%.
If you’re new to exchange-traded funds,
be sure to visit TradingMarkets’ Knowledge Center,
dedicated to explaining the basics of trading and active investing in ETFs and
mutual funds. Just click on the Funds tab
near the top of this page, then click on the Knowledge
Center tab.Â
You also will find lessons on trading
exchange-traded funds in the Stocks Education area of TradingMarkets.com. In
particular, check out my three-part series on trading ETFs, starting with
Average Crossovers. I also recommend newcomers read my tutorial,
HOLDRs: Unique Opportunity And Risk.
All stocks and exchange-traded funds
are risky. In any new trade, reduce your risk by limiting your position size and
setting a protective price stop where you will sell your new buy or cover your
short in case the market turns against you. For an introduction to combining
price stops with position sizing, see my lesson,
Risky Business. For further treatment of these and related topics,
you’ll find extensive lessons in the Money
Management area of TradingMarkets’ Stocks Education section.