The major semiconductor exchange traded funds, including the Market Vectors Semiconductor ETF (NYSEArca: SMH) and the iShares PHLX Semiconductor ETF (NasdaqGM: SOXX), followed broad market benchmarks higher Monday as traders continued digesting media reports that ntel (NasdaqGS: INTC), the world’s largest semiconductor manufacturer by market value, could acquire rival Altera (NasdaqGS: ALTR).
After surging more than 28% last Friday when news of a possible acquisition by Intel was first reported, Altera is down about 4% today, giving the maker of chips for embedded devices and data servers a market value of just under $13 billion. [Some Relief for Chip ETFs]
For now, the idea of an Intel/Altera marriage is a rumor, so semiconductor stocks and ETFs could be subject to “buy the rumor, sell the news” treatment if a deal is reached. However, the rumor coupled with last week’s retrenchment by chip ETFs has stoked interest in a leveraged semiconductor fund.
The Direxion Daily Semiconductors Bull 3x Shares (NYSEArca: SOXL) is up nearly 4% today on volume that is already about 35% higher than the trailing three-month daily average. SOXL’s bullish Monday showing comes after traders poured $13.5 million into the ETF last Friday, according to Direxion data. Only two of Direxion’s triple-leveraged ETFs saw greater Friday inflows than SOXL.
SOXL attempts to deliver three times the daily performance of the PHLX Semiconductor Sector Index, the underlying benchmark for the $549 million SOXX, an ETF that suffered outflows of more than $9 million last week. [Maybe More Pain for Chip ETFs]