The VanEck Vectors Semiconductor ETF (NYSEArca: SMH) closed lower Thursday amid mixed earnings reports from key constituents Dow component Intel (NasdaqGS: INTC) and Qualcomm (NasdaqGS: QCOM).
Still, SMH, one of the bellwether semiconductor exchange traded funds, is in solid shape. Earlier this week, SMH and rival chip ETFs rallied on news that Japanese technology company SoftBank Group Corp. announced a deal to acquire Britain’s ARM Holdings (NasdaqGS: ARMH) for $32 billion.
SoftBank is seeking to expand into the so-called Internet of Things, or home devices from smart-thermostats to security cameras and domestic appliances that connect online, the Associated Press reports.
SMH and the iShares PHLX Semiconductor ETF (NasdaqGM: SOXX) have recently been durable performers as semiconductor stocks are rebounding to steady the broader technology sector, but that does not mean the gains are over for this suddenly hot group.[related_stories]
SMH “has outpaced peers investing in sector equities in the past five trading sessions, up nearly 5%. It has turned in a 9% gain in the month ended July 20 and a 17% gain year to date,” according to Investor’s Business Daily. “Despite Thursday’s stumble, funds in this industry group are showing strong momentum. Several leveraged and nonleveraged ETFs in this space, including SOXX, boast relative strength lines bolting to new highs.”