Semiconductors Cool Off

After a strong finish in 2009, semiconductor stocks have pulled back in the first couple of trading weeks of the new year.

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The iShares S&P North American Technology-Semiconductors Index Fund (IGW) is down nearly 5% since the beginning of 2010 compared to a plus 2% performance for the broader market.

Semiconductor stocks are coming off a hot year and strong finish to 2009.  IGW is up 74% in the past 12 months with 23 points of the gain coming in the last 2 months of 2009.

Top holdings for IGW include Applied Materials (AMAT), Intel (INTC) and Texas Instruments (TXN).  Despite Intel’s recent strong earnings report, market participants are split on the outlook for the industry.  According to a recent MarketWatch column, some traders feel that the sector is just taking a breather after an impressive outperformance run while others believe earnings may have already peaked.

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