The Battle Road Tech Index™ fell 2.0 percent for the week ended May 15, 2009, closing at 1210. Year-to-date, the index is up 21.0 percent, having started at a value of 1000. For the week, 19 of the 25 Index components were in negative territory.

The following companies were notable movers for the week:

Shares of Microsoft (NASDAQ: MSFT, $20.22) gained 4.1 percent in the past week. The company announced plans to issue $3.8 billion of debt this week, prompting speculation that it is in the market for a large acquisition. The company is armed with $25 billion in cash and short term investments, $4 billion in long term investments, has scaled back on share repurchases, and generates $20 billion per year in cash from operations. We believe that while Microsoft will look to be acquisitive while economic and revenue growth remain flat, the debt offering does little to improve its capital facilities, and does not necessarily indicate that a capital structure changing acquisition is imminent.

EMC (NYSE: EMC, $11.94) shares were off 5.5 percent this week, possibly in response to Oracle’s acquisition of privately-held virtualization software company Virtual Iron, which will bring Oracle into direct competition with VMware, the market leading software viritualiztion company in which EMC holds more than 90 percent of the voting rights. VMware’s operating margin is almost twice that of EMC overall. Investors may also have been spooked by Cisco’s comments about “limited visibility” in the IT hardware sector.

For the second straight week, Amazon.com (NASDAQ: AMZN, $73.60) was among the largest percentage decliners in the Battle Road Tech Index. AMZN declined by 5.6 percent this past week, possibly on the heels of new data disclosed by Form4Oracle, which suggested that insider stock transactions were a negative $82.2 million during the April-May time-frame. The market research company ComScore predicted that online retail sales would be flat in 2009. While this is certainly better than the overall retail sales decline of 8 percent, the concern is that AMZN’s growth rate may be slowing. Last week we discussed the potential impact of state regulators forcing Amazon.com to pay state sales tax on its ecommerce sales.