Slew of Deals Drives ETFs Early
November 15th at 8:30am by Tom Lydon
A jump in corporate deals combined with solid news about retail sales put some gas in the engine of exchange traded funds (ETFs), which are moving higher in early trade.
Deal-making is driving ETFs in early Monday morning trading as heavy-equipment manufacturer Caterpillar Inc. (NYSE: CAT) announced it would pay $7.6 billion for Bucyrus International Inc. (NYSE: BUCY) who’s shares have skyrocketed almost 30% so far today. Market Vectors Coal (NYSEArca: KOL) is up nearly 1.5% in early trading; Bucyrus International is 5%. [4 Reasons Coal ETFs Burn Bright.]
Meanwhile, U.S.-listed shares of Potash Corp. of Saskatchewan (NYSE: POT) dropped over 2% in early trading after miner BHP Billiton Ltd. (NYSE: BHP) said it will withdraw its $39 billion hostile offer. Potash will use the funds to buy back its own shares. PowerShares Global Agriculture (NYSEArca: PAGG) is down nearly 1% in early trading; Potash is 6.7%. [The Benefits of Owning Commodity ETFs.]
Lowe’s Cos. (NYSE: LOW) shares are trading up over 1% after the nation’s No. 2 home-improvement retail chain reported that sales increased 1.9% in the third quarter – which was still below analysts’ expectations. Retail HOLDRs (NYSEArca: RTH) is unmoved by the reports and is so far flat in trading; Lowe’s is 6.1%. [Retail ETFs Gear Up for Holidays.]
Investors are still eying Ireland and Greece. Over the weekend, media reports said that European Union government officials are pressuring Ireland to take a bailout in order to keep a lid on jittery bond markets, but Irish representatives responded by denying claims that Dublin needs a bailout. As for Greece, its 2009 deficit was revised up to 15.4% of gross domestic product from a previous estimate of 13.6%. iShares MSCI Ireland (NYSEArca: EIRL) is flat so far today; last week, it lost more than 5%. [PIIGS Not Out of the Woods Yet.]
Gregory A. Clay contributed to this article.
