Stock exchange traded funds rose Tuesday on a $8.5 billion cash deal for Internet telephone service Skype, although suitor Microsoft (NasdaqGS: MSFT) closed the session in negative territory.
Molycorp (NYSE: MCP) shares fell 5% in after-hours trading Tuesday following the company’s quarterly earnings as profit and revenue both came in well short of expectations. The stock dropped about 7% in Tuesday’s regular trading. The bearish action in Molycorp hit the $500 million Market Vectors Rare Earth/Strategic Metals ETF (NYSEArca: REMX). The ETF counts Molycorp as its third-largest holding at about 7% of the fund. [Molycorp to Weigh on Rare Earths ETF After Earning Miss]
ETFs that follow consumer discretionary stocks will see the action piloted by bellwether Disney (NYSE: DIS) on Wednesday following quarterly results. The company’s earnings came in lower than expected after Tuesday’s closing bell. Evercore Partners confidently boosted its profit estimates for Disney ahead of the results. [Disney Earnings to Drive Consumer Discretionary ETFs]
Internet sector ETFs enjoyed a nearly 3% rally in eBay (NasdaqGS: EBAY) on Tuesday after an $8.5 billion deal for Skype, in which it has an ownership stake. Skype’s acquisition by Microsoft (NasdaqGS: MSFT) is “a positive for eBay in our view as it will help unlock about $2 a share in value by monetizing eBay’s 30% equity ownership in Skype, boosting the company’s financial flexibility to pursue strategic acquisitions and/or share buyback,” said Jefferies analysts in a note Tuesday. [eBay Hoist Internet ETFs on Skype Deal]
The manager of a nearly $700 million ETF that holds silver says it is bullish on the metal despite last week’s sell-off, although there is a catch. William Rhind, manager director at ETF Securities U.S., says silver prices should mend “barring further Comex margin increases.” Last week’s 30% plunge in silver has been blamed on profit taking and signs of life in the U.S. dollar. Margin hikes in silver contracts have also reportedly shaken out speculators who flocked to the rally. [ETF Manager Likes Silver, Barring Further Margin Increases]