Networking Sector Index Components
Francis, here are the components of $NWX.X. It's not the greatest index for the networkers, but most of the time it will do... we sometimes watch the $GIP.X index and the BDH Broadband HOLDRS:
$NWX components:
ADCT, ADPT, ALA, CIEN, COMS, CS, CSCO, ECIL, LU, NN, NT, PAIR, TLAB
$GIP components:
ADCT, BRCM, CIEN, COMS, CS, CSCO, ETEK, LU, MOT, NN, NT, QCOM, SFA, TLAB
BDH broadband HOLDRS:
LU, NT, JDSU, QCOM, MOT, TLAB, GLW, SCMR, BRCM, CMVT, CNXT, SFA, AMCC, CIEN, CMTN, NXTV, PMCS, RFMD, TERN
I see the NWX as the "purest" index for the networkers as it has fewer dogs and/or uncorrelated components... e.g., in the GIP and BDH, BRCM is actually a semiconductor company (although granted, they sell a lot of silicon to the networking companies), CS isn't a front-line player anymore, NN was sold, etc. And, there is decent representation in the NWX both on the enterprise networking side, and the telco/wide-area/optical equipment players. The only problem is some of the component stocks are a bit stale, certainly it wouldn't be hard to come up with a much better list of symbols to create a better index for the networkers; but $NWX has served us pretty well as a coarse thermometer in the past.
BDH has some interesting networking & telco-equipment stocks but is a bit too heavily-weighted with semiconductor stocks. So, we'd rather watch the $NWX for the networkers, and use the $SOX to watch the semi's.
It's often a good idea to monitor the enterprise networkers seperately from the Telco-equipment manufacturers... e.g. something big moving EXTR could also move CSCO up; and something moving CIEN may move SCMR up; but there is often little linkage between the two major sides of the networking sector (enterprise, and telco equipment). Of course, there are many other ways to slice and dice the networking sector into sub-sectors (Optical Switching, High-End Routers, etc.)
-Steve |
