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Market Update

The Week in Stocks and Funds

The market plays defense.

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Hopes for a summer technology-stock rally appear to be fading, as disappointing quarterly sales and earnings forecasts from the likes of Microsoft  (MSFT) and Tellabs  (TLAB), among many others, took a toll on the sector. For the week, the Nasdaq Composite index declined 2.6% to 2,029. The S&P 500 fell 0.4% to 1,210. The Dow Jones Industrial Average fared the best of the three, rising 0.4% to 10,577.

Fund Category Returns
For the week through Thursday, specialty-technology funds occupied their seemingly customary spot at the top of the loser's list. The category declined 4.9% for the week, and funds packed with particularly speculative stocks fell much harder. For example, Van Wagoner Technology  (VWTKX) plummeted 13.4%. As senior analyst Christopher Traulsen points out in his analysis of the fund, this is one of the most volatile offerings around. Similarly, Firsthand e-Commerce Fund's (TEFQX) 11.2% loss for the period is no surprise. According to analyst Bradley Sweeney, the fund has performed poorly since technology stocks began to falter last March.

Scott Cooley does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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