Telecom exchange traded funds were among Tuesday’s best-performing sectors as a 5% rally in Level 3 Communications (NasdaqGS: LVLT) carried the group higher.
Level 3 shares were close to setting a new 52-week high as investors continued to bid the stock higher in the wake of the company’s recent quarterly results.
In April, the company said it would acquire Global Crossing in a $3 billion deal (NasdaqGS: GLBC). Level 3 reported a smaller loss in its latest quarter.
The stock is a component in sector ETFs such as SPDR S&P Telecom ETF (NYSEArca: XTL) and Vanguard Telecommuncations Services ETF (NYSEArca: VOX).
The Vanguard ETF rose more than 1% Tuesday and was up about 7% so far this year through Monday.
“Prospects for major telecommunications firms remain solid. Demand for smartphones and mobile broadband is still rising at an impressive clip,” Morningstar’s Robert Goldsborough says in an analyst report on the fund.
“And recurring telecom-services revenue tied to these devices also is likely to grow sharply, given that smartphone users are far more likely to surf the Internet and use multimedia messaging services,” he added.
Vanguard Telecommuncations Services Index
