Sector Week-in-Review: Momentum in Internet and Leisure

Includes: HHH, PEJ, PXE, XLE
by: Nick Perry

Nick Perry (Schaeffer's Investment Research) submits: Last week we saw a slight downward bias against a mostly quiet picture with retail and housing among the weakest groups.

This week we find a modest upside bias with Internet stocks leading the charge:

The Internet HOLDRS Trust (NYSE:HHH) edged out the PowerShares Leisure & Entertainment (NYSEARCA:PEJ) fund to take the top spot. The rest of the best-performing list was tightly clustered as groups like silver, semis, small-caps, and retail all showed moderate gains. Weakness was limited to energy-related funds.

For a longer-term perspective, the bullets below show how the ETFs listed above have fared over the last six months, prior to this week. In other words, it shows how they had been performing before this week's move.

Prior Six-Month Returns for This Week's Top Performing Sector Exchange Traded Funds:

* Internet HOLDRS (HHH) -19.9%
* PS Leisure & Entertainment (PEJ) -5.8%
* PS Hardware & Consumer Electronics (PHW) -9.6%
* iShares Silver Trust (NYSEARCA:SLV) n/a
* PS WilderHill Clean Energy (NYSEARCA:PBW) -14.4%
* Semiconductor HOLDRS (NYSEARCA:SMH) -11.4%
* PS Water Resource (NASDAQ:PHO) -6.2%
* First Trust DJ Select MicroCap (NYSEARCA:FDM) -6.5%
* iShares GS Semiconductor (IGW) -10.7%
* iShares Russell 2000 (NYSEARCA:IWM) -4.1%
* Retail HOLDRS (NYSEARCA:RTH) -7.5%
* PS Building & Construction (NYSEARCA:PKB) -19.3%

Prior Six-Month Returns for This Week's Bottom Performing Sector Exchange Traded Funds:

* iShares Lehman 20+ Year Bond (NYSEARCA:TLT) -4.3%
* streetTRACKS Gold (NYSEARCA:GLD) +10.2%
* iShares Lehman 7-10 Year Bond (NYSEARCA:IEF) -0.9%
* iShares Lehman Aggregate Bond Fund (NYSEARCA:AGG) -1.0%
* Regional Bank HOLDRS (NYSEARCA:RKH) +4.7%
* iShares Lehman 1-3 Year Bond (NYSEARCA:SHY) -0.1%
* PS Oil Services (NYSEARCA:PXJ) +6.7%
* Oil Service HOLDRS (NYSEARCA:OIH) +2.7%
* iShares GS Natural Resources (NYSEARCA:IGE) +10.5%
* iShares DJ U.S. Energy (NYSEARCA:IYE) +12.2%
* SPDR-Energy (NYSEARCA:XLE) +11.2%
* PS Energy Exploration & Production (NYSEARCA:PXE) +15.5%

The relatively strong performance of the iShares Russell 2000 (IWM) fund is worth noting. This ETF tracks the action of the small-caps and I think that the group offers an interesting opportunity.