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Biotech ETFs Rise on M&A Buzz

NEW YORK ( TheStreet) -- Pharmaceutical and Biotech ETFs are prominent gainers on Monday morning as M&A deals appear poised to pick up in the sector. Speculation that Sanofi Aventis (SNY - Get Report) is looking to acquire Genzyme (GENZ) sent the stock of Genzyme soaring on Friday. Word on the street is that other large pharmaceutical majors such as GlaxoSmithKline (GSK - Get Report) and Johnson&Johnson (JNJ - Get Report)may also join the race.

Better-than-expected results from Eli Lilly (LLY - Get Report) and Bristol-Myers Squibb (BMY - Get Report) also appear to have boosted interest in pharma ETFs.

The SPDR S&P Biotech Fund (XBI) is rising 4% on Monday morning. Its top holdings include Regeneron Pharmaceuticals (REGN), up 5.4% and Biogen (BIIB - Get Report), up 4.9%. Other biotech ETFs including iShares Nasdaq Biotechnology (IBB) and Biotech HOLDRS (BBH) also gained smartly.
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PowerShares Dynamic Pharmaceuticals (PJP) is up 2% on Monday forenoon trading.

Other ETF gainers include the iShares Dow Jones Transportation Average (IYT). The ETF is heading higher after Fedex (FDX - Get Report) raised its full-year outlook.

Homebuilder ETFs also rebounded on Monday after new homes sales in June showed strong monthly gains of 23.6%. The SPDR Homebuilders ETF (XHB) is up 2.1%.

-- Reported by Shanthi Venkataraman in New York.

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Copyright 2010 Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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