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) 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) and Johnson&Johnson ( JNJ)may also join the race.

Better-than-expected results from Eli Lilly ( LLY) and Bristol-Myers Squibb ( BMY) 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), 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) 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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