Computer Networking ETFs Fly On

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Computer networking ETFs were top of the heap Wednesday afterRiverbed Technology ( RVBD ) blew away second-quarter forecasts.

IShares S&P North American Technology Multimedia Networking Index ( IGN ) surged 4.08% as Riverbed shares rocketed 27% in six times average volume. Riverbed topped both earnings and sales expectations for Q2 and said Q3 results would be higher than expected.

Another IGN holding,Juniper Networks ( JNPR ) -- the world's No. 2 maker of networking gear -- vaulted 13% after it announced a $75 million deal with competitor Riverbed to license products that boost application performance.

IGN's third-biggest gainer, Motorola Solutions ( MSI ) soared 6% after raising its quarterly dividend and announcing it would buy back $2 billion of its shares.

Broadcom 's ( BRCM ) second-quarter earnings surprise pushedPowerShares Dynamic Semiconductors (PSI) ahead 3.46%. Deutsche Bank analyst Ross Seymore reiterated his buy rating with a $44 price target on the chipmaker's shares.

"Broadcom delivered strong Q2 results driven by combo chip upside and guided for solid 3Q growth as company-specific product cycles and share gains largely offset macro headwinds," Seymore wrote in a client note. "We believe these share gains are likely to continue into 4Q12/2013 and expect shares to react favorably."

Broadcom shares jumped nearly 9%.

Both IGN and PSI are trading below their 50- and 200-day moving averages, so it's too soon to tell whether today's surge could spawn a new uptrend or whether it's just a countertrend rally in a downtrend that started in late March. They have very weak Relative Strength Ratings of 17 and 34. That means they're underperforming 85% and 66% of the market. They also have poor Accumulation/Distribution Ratings of D+ and C-, which indicates institutions are selling more shares than buying.

Market Overview

In afternoon trade, SPDR S&P 500 (SPY) was ahead 0.25%.SPDR Dow Jones Industrial Average (DIA) added 0.79%.PowerShares QQQ (QQQ), a basket of the 100 largest nonfinancial stocks on the Nasdaq, shed 0.30% owing to an earnings miss by index heavyweight,Apple (AAPL), which sent the tech giant down nearly 4%.

Other major earnings misses includedNetflix (NFLX), which crashed 25%, andBuffalo Wild Wings (BWLD), whose shares were clipped 11%.

"This week has seen several major markets set in motion and we expect the majority of these moves to continue through the end of trading Friday," Waverly Advisors wrote in a daily client note. "Equities are breaking to the downside; do not expect clean, easy trades, but forces appear to be aligning to support a continued sell-off."

IShares MSCI EAFE Index (EFA), tracking developed foreign markets, and iShares MSCI Emerging Markets Index (EEM) both climbed 0.87%.

Tom McClellan of the McClellan Market Report told clients he believes the market is pulling back in an uptrend that should send the major indexes to new highs. He cites commitment of traders data, which tracks fund flows in the stock market.

"Notice back in early 2011 that opinions about the economy got really ugly about a month after the tsunami that hit Japan, but then turned around sharply as the Dow Jones pushed to an even higher high," McClellan wrote in his daily newsletter. "This current situation seems to be set up for a similar rebound, with the stock market due to turn up in August."

Follow Trang Ho on Twitter @TrangHoETFs .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs

Referenced Stocks: BRCM , IGN , JNPR , MSI , RVBD

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