The Innovation Index drops 1%, even for the year – Weekly Report 03-07-07

The Innovation Index dropped another 1% last week owing to broad market weakness, and is now unchanged for the year. However, The Innovation Index leads the major U.S. indices. S & P 500, NASDAQ and Dow Jones Index are each down 2% for the year.



The Innovation Index closed at 69.28 on March 07, 2007, unchanged, from the closing price of 69.31 on December 29, 2006.

Only 4 of the Top 20 Innovators showed positive gains, 14 of the Top 20 Innovators dipped in the red, and 2 Innovators were unchanged last week.

Weekly Advances

Apple Inc. (NASDAQ: AAPL) made a comeback last week, and was up 4% for the week, and 3% for the year. The excitement surrounds the impending launch of Apple TV, potential yield of $900 million from Adobe’s first design suite CS3 to be launched on Intel-based Macs, and plans to open 35 to 40 new stores in 2007. Apple is opening a new store in Austin, Texas this week. Apple also released the latest versions of iTunes and QuickTime, and announced plans to use NAND flash memory.

Google Inc. (NASDAQ: GOOG) was up 1% last week. Google won a key court ruling in a patent dispute over its popular three-dimensional software that provides Internet tours of the Earth. Friendster hooked up with Google to provide ads and monetize the visitors and traffic. IBM (NYSE: IBM) and Google are partnering to bring the consumer Internet into the office – “millions of users of IBM WebSphere will be able to choose from 4,000 existing Google Gadgets services -- mini-Web applications that users can add with the click of a button onto public sites or internal office intranets.” Google's collection of Web sites replaced Microsoft Corp.'s as the third most trafficked in the United States.

What if Apple and Google merged? Find out more at: The Apple Google Juggernaut - $66 Billion - overtaking Microsoft?

HP - Hewlett-Packard Co. (NYSE: HPQ) was up 2%, and International Business Machines Corp. (NYSE: IBM) was up 1% last week.

Weekly Declines

Intel Corporation (NYSE: INTC) dropped 4% last week, and is now down 5% in 2007. Research In Motion Limited (NASDAQ: RIMM) fell 4% also, however is up 6% in 2007. 12 other innovators dropped 1% to 3% last week owing to wide-ranging market weakness. In particular, eBay Inc. (NASDAQ: EBAY) dropped 3%, and is now only up 3% for the year. eBay was up over 10% earlier in the year.

Yearly Leaders and Laggards

Yahoo! (NASDAQ: YHOO) is leading the top 20 innovators with 19% gain for the year; however, Yahoo! shares were down 5% in today’s trading owing to the changing partnership with AT&T. A joint statement was made by AT&T and Yahoo to alleviate the concerns from the investors and curb the speculation. Target Corp (NYSE: TGT) is up 6% for the year. Target announced the grand opening of 15 Target stores on Sunday, March 11, and also announced same store sales increase of 5.7% in February. Starbucks Corporation (NASDAQ: SBUX) dropped another 1% last week, and is now down 14% for the year, after posting a solid 18% gain in 2006. Dell Inc. (NASDAQ: DELL) is also back in double-digit losses for the year at 11%. Dell has a tough road ahead as it begins the turnaround.

About The Innovation Index

The Innovation Index introduced in December, 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.

The Normalized Innovation Index is even more impressive, and has returned 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.

The alphabetical list of the top 20 Innovators of The Innovation Index along with their stock ticker symbols are presented below:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)

The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.

Disclaimer: I invest in the stocks comprising The Innovation Index.

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