Technology exchange traded funds (ETFs) watched and waited while two technology giants put their dukes down and talked about being lovers, not fighters.

Talks between Microsoft (MSFT) and Yahoo (YHOO) picked up today after both parties batted around the idea of a friendlier deal. Nothing is imminent, say those in the know, and they even cautioned that nothing could come of the talks. The sticking point is the offer price: Yahoo wants a bigger offer and Microsoft hadn’t wanted to ante up a penny more, although earlier this week it hinted it might raise the bid.

Yahoo shares shot up 6.9% today, while Microsoft went slightly down by 0.5%.

Some tech-related ETFs held steady at the close today:

• iShares Dow Jones U.S. Technology (IYW): down 7% year-to-date; Microsoft is 12.4%; Yahoo is 1.9%
• Technology Select Sector SPDR (XLK): down 7% year-to-date; Microsoft is 10%; Yahoo is 1.7%
• Internet HOLDRs (HHH): down 2.8% year-to-date; Yahoo is 27.1%

Tags: Sector ETFs, Technology