Many cities and towns across the United States will have parades and observances, for the sacrifices made for this land, says Alejandro Martínez-Cabrera for The San Francisco Chronicle. (Reasons that you may prosper from an aerospace and defense ETF.)

Related ETFs that are in line with this day include:

• PowerShares Aerospace and Defense (NYSEArca: PPA): up 17.4% year-to-date

• iShares Dow Jones US Aerospace (NYSEArca: ITA): up 17.9% year-to-date

Have a nice Veterans Day!

For more stories about aerospace and defense, visit our aerospace and defense category.

Here are some points in favor of the aerospace and defense industy:

• Defense Industry Daily says that momentum had been building to sell the F-22A Raptor overseas to countries considered allied with the United States, such as Japan. But F-22 production is set to end sometime around 2010; exporting them could delay the need to make a decision. As far as Japan goes, the F-22 “is at the top of their list.”
• Mike Allen for San Diego Business Journal reports that this industry could be one of the major employment opportunities in the United States. General Atomics, which makes the unmanned drones used extensively in the Middle East wars, has added 800 jobs in the past year.
• Meanwhile, the Navy plans to commission a new amphibious assault ship, the USS Makin Island, this week, and next year the USS Carl Vinson becomes the third aircraft carrier to be home-ported locally.
• The ongoing strife in Afghanistan has led to a dilemma for Obama, who needs to decide whether to send more troops. If troops are increased again, it could keep defense spending elevated. Also worth noting is that, according to Martha Raddatz at ABC News, the troops that were part of the increase ordered in February are still not there yet. This is because the military needs time to organize the supplies these additional forces will need.

On the downside, Boeing (NYSE: BA) reported a $1.6 billion loss in the third quarter, thanks to delays in the 787 Dreamliner program.

For more stories about aerospace, visit our aerospace and defense category.

• PowerShares Aerospace & Defense (NYSEArca: PPA): up 16.9% year-to-date

• iShares Dow Jones U.S. Aerospace & Defense (NYSEArca: ITA): up 17.3% year-to-date

The latest report from the Labor Department stating first-time jobless claims fell 10,000 last week to 570,000, a hair above economists’ expectations of 565,00. Those who continue to file unemployment claims fell more than expected to 6.13 million, lower then the 6.2 million forecast, reports Shobhana Chandra for Bloomberg.

The Commerce Department reported that U.S. GDP shrank by 1% annualized in the second quarter. The number, which represents the value of goods and services produced within the United States, was a better than the 1.5% decline anticipated by economists. What appears to be most promising with the report is that revisions showed smaller dips in consumer spending, exports and housing construction, reports Martin Crutsinger of the Associated Press.

In the aerospace sector, airplane manufacturer Boeing (BA) announced that its long-delayed 787 jetliner will be ready for a test flight by year’s end.  The company has witnessed various false starts and production delays, however, the 787 remains to be the best-selling new plane and is expected to be profitable. The news sent the PowerShares Aerospace & Defense (PPA) up 1% in morning trading.

The recovery worries further trickled down to the oil markets as crude oil fell to around $71/barrel on the New York Mercantile Exchange.  Additionally, a report by the Energy Department showed that U.S. crude stockpiles grew by 200,000 barrels for the week ending Aug. 21, putting pressures on supply and demand, states Carlo Piovano of the Associated Press.  The United States Oil Fund (USO) was down 1.6% in intraday trading.

Overall, all three major indexes were down in morning trading with the Dow Jones Industrial Average dropping 0.4%, the S&P 500 declining by 0.8% and the Nasdaq giving up 1.1%.

For more stories on aerospace and defense, visit our aerospace and defense category.

Kevin Grewal contributed to this article.

Reuters reports that big defense contractors could be set to lose jobs as the Pentagon cuts traditional spending on weapons. In turn, the smaller, specialty companies will have an influx of hiring as the country expands resources to protect ground troops and computer networks.

Christopher Drew for The New York Times reports that the 58-to-40 vote clearly gives the Obama administration more room to cut defense spending. The F-22, the world’s most advanced fighter, has been the center of a battle over the administration’s desire to move  more of the Pentagon’s resources away from conventional warfare projects and putting more toward battling insurgencies.

Aircraft maker Boeing Co. (BA) said that Pentagon cuts would claim 1,000 jobs in its defense business, and the company has already been hurt by the commercial slump.

• PowerShares Aerospace and Defense (PPA): up 2.4% year-to-date; Boeing 7.8%

• iShares Dow Jones US Aerospace And Defense (ITA): up 1.4% year-to-date; Boeing 7%

For more stories about defense, visit our aerospace and defense category.

Chipmaker Advanced Micro Dynamics (AMD) reported a second-quarter loss of $0.62/share a far cry from the $0.47/share loss expected by Wall Street.  On the positive side, Wells Fargo (WFC) reported a jump in earnings of 47% which resulted in profits of $0.57/share.  These results smashed analysts’ expectations of $0.34/share.  The financial sector remained busy, with disappointing earnings from Morgan Stanley (MS).  The financial giant reported a loss of $1.10/share as compared to an expected loss of $0.49/share. The news sent the Financials Select Sector SPDR (XLF) down nearly 1% in morning trading.

In the aerospace world, plane maker Boeing (BA) announced a 17% increase in second-quarter profits, earning $1.41/share and beat Wall Street’s expectations of $1.21/share.  Revenues of the commercial airplane maker increased and announced that it will release a revised schedule for the long-delayed 787 jetliner.

Drug giant Pfizer (PFE) topped analysts’ expectations by a penny, reporting earnings of $0.48/share.  Sales were down in all five of Pfizer’s units, but the final ink is getting ready to dry on its billion-dollar purchase of Wyeth (WYE).  The news sent the SPDR S&P Pharmaceuticals (XPH) up about 0.3% in morning trading.

In other news, GE Capital, the financing arm of conglomerate General Electric (GE) stated that it plans to exit the government’s Temporary Liquidity Guarantee Program and will no longer issue government-guaranteed short-term debt and will be able to issue non-guaranteed long-term debt with maturities of up to three years.

There is more positive news that the recession may be coming to an end.  The Federal Housing Finance Agency reported that housing prices posted the smallest decline in 10 months in May. Prices fell 5.6% year over year in May and five U.S. regions witnessed price increases .

Overall, all three major U.S. indexes are down in morning trading.  The Dow Jones Industrial Average dropped 0.2%, the S&P 500 is down 0.3% and the Nasdaq declined 0.1%.

For more stories on the financial sector, visit our financial category.

Kevin Grewal contributed to this article.

The National Association of Realtors said that May sales of existing homes rose by 2.4%. This is the third monthly increase this year, but a bit short of the 2.8% increase expected by analysts. This is promising news, but investors are still wary of a complete housing recovery because of the plunge in prices of existing homes; prices dropped a whopping 16.8% to a median price of $173,000. The news sent the iShares Dow Jones U.S. Real Estate (IYR) up nearly 0.5% in morning trading.

Further uncertainty of the fate of the markets has been brought on by today’s start of a two-day monetary policy meeting held by the Federal Reserve. The Fed is expected to keep key interest rates at or near zero and contemplate over whether or not to raise rates in the near future to curb inflation.

Another cause of caution has been stirred up by the Treasury Department’s auction of $60 billion in two-year notes. In order for the government to continue financing its bailout and stimulus programs, demand for Treasury notes needs to stay strong and yields cannot skyrocket. The iShares Barclays 1-3 Yr Treasury Bd (SHY) is up about 0.1% in morning trading.

On a different note, the aerospace and defense sector took a blow as Boeing (BA) announced that the initial test flight of its much-anticipated 787 jetliner will be delayed, citing a need to reinforce part of the aircraft. As a result, Boeing said that it will not announce when it expects the test flight to take place or for deliveries of the plane to take place for several weeks to come. The news sent the PowerShares Aerospace & Defense (PPA) down about 2% in morning trading; BA is 7.3%.

The volatility of crude oil continues to linger around the industry. Continued uncertainty of the global economy and demand for black gold were offset by the weak U.S. dollar, which drew some speculators back to commodities, but not by much. Crude continued to slide and fell below $67/barrel on the New York Mercantile Exchange. Despite this decline, the US Oil Fund (USO) gained nearly 0.2% in intraday trading.

As many consumers think twice about spending an extra dollar, thrifty measures have lead to many home-cooked meals and families eating dinner at the dinner table as opposed to being waited on at a restaurant. This trend has been beneficial for grocers such as Kroger Co. (KR), which posted a gain in first-quarter profits of 12.7%, or $0.66/share. The Cincinnati-based company beat Wall Street’s expectations and affirmed its full-year earnings guidance of $2 to $2.05/share. Despite the stellar performance, the Retail HOLDRs (RTH) was down 1% in morning trading; KR is 4.3%.

By mid-morning, all three major U.S. indexes were trading in negative territory. The Dow Jones Industrial Average is down nearly 0.5%, the S&P 500 dropped nearly 0.4% and the Nasdaq declined about 0.6%.

For more stories on Real Estate, visit our real estate category.

Kevin Grewal contributed to this article.

Scott Sacknoff of SPADE Indexes states the following factors make the sector appealing:

• A 5.6% increase in the aerospace budget, much of which will fund the ongoing wars this year
• The launch of rockets by Iran and North Korea are stirring up concerns that something might happen
• Valuations of companies in the sector are at the bottom of the gutter and some companies are showing healthy balance sheets
• A weak dollar makes aerospace more attractive to foreigners
• The satellite and space business remain strong regardless of the economic downturn

This doesn’t mean that it is all gravy for the sector.  As the economy continues to rebound, President Barack Obama and his administration will start reducing spending programs and start paying back some of the nation’s debt.  Unfortunately, defense is one of the largest discretionary items and will probably feel some of this aforementioned wrath.

This has caused aircraft manufacturer, Boeing (BA) to cut its global outlook for aircraft demand and focus on existing orders rather than chasing new orders.  The company reported that over the next 20 years, it anticipates 29,000 new planes to be ordered worldwide, down from an earlier forecast of 29,400, states the Associated Press.

If you do want to grab exposure to the sector, take a look at the following ETFs:

• iShares Dow Jones U.S. Aerospace & Defense Index (ITA): up 7.8% year-to date and above its 200-day moving average; BA is 8%.

• PowerShares Aerospace & Defense (PPA): is up 6.4% and above its 200-day moving average; BA is 7.3%.

For more stories on aerospace and defense, visit our aerospace and defense category.

Kevin Grewal contributed to this article.

U.S. Treasuries fell and the dollar weakened against the euro as investors got more concerned of the effects that high interest rates that the government faces on money borrowed to finance the bailout of U.S. financial institutions will have on the overall economy.

Many prominent financial gurus, such as Pimco’s Bill Gross, suggest that the spending in Washington is so frivolous that it may eventually cause the nation to lose its AAA credit rating, something that the British are already fearing.  This would make lift borrowing costs, possibly spur inflation and make it even harder to dig us out of our current financial mess.  Treasury Secretary Timothy Geithner doesn’t think that this will happen.

To help curtail the enormous amount of spending in Washington, President Barack Obama is making some adjustments.  He just signed a bill into law that will tighten the controls on defense spending.  His motivation behind this law was a study that outlined nearly $295 billion of taxpayer’s money that was wasted on cost overruns involving 95 defense programs, states the Associated Press.  This news sent the PowerShares Aerospace & Defense (PPA) down nearly 0.4% in intraday trading.

Black gold continues to stay at elevated levels, despite a weakening dollar.  The volatile commodity stayed above $61/barrel on the New York Mercantile Exchange on supply concerns fueled by two refinery fires in the United States and fighting by the government and rebels in Nigeria, tates Pablo Gorondi of the Associated Press.  As a result, the United States Oil Fund (USO) gained 0.1% in morning trading.

The Dow Jones Industrial Average was up 0.8%, the S&P 500 gained 0.7% and the Nasdaq jumped 0.5% in morning trading.

Kevin Grewal contributed to this article.

Lockheed Martin Corp. (LMT) reported better-than-expected earnings but the costs to keep the employees compensated have dragged on any gains. It seems that pension expenses are the heaviest weight of all upon the company’s profit. Defense Secretary Robert Gates’s budget shake-up won’t affect its 2009 outlook, according to a Pentagon insider, reports August Cole and Kerry R. Grace for The Wall Street Journal.

The company’s first-quarter net income dipped 8.8% to $666 million, or $1.68 a share, from $730 million, or $1.75 a share, a year ago. The pension-related expenses of 19 cents a share and a pension gain boosted year-earlier earnings by five cents a share.

Robert Gates of the Pentagon wants to end what would be a Lockheed-led effort worth more than $13 billion to build replacement presidential helicopters and to wind down production of Lockheed’s F-22 Raptor fighter after 187 jets are built.In the meantime, the F-35 would be a sale booster in Lockheed’s future.

Boeing (BA) today reported sharply lower earnings. The aircraft manufacturer states that the global economic meltdown has really taken its toll on airline travel and the commercial airline markets. Analysts forecasted earnings of $0.93/share, but actual earnings were $0.86 cents/share.

Fitch Ratings gave the outlook for the sector a solid bill of credit and proposals were not as dramatic as anticipated, reports Associated Press for Forbes. While Gates’ proposal will shift Pentagon spending, they weren’t as dramatic as had been expected. The full financial impact won’t be known until the budget is released, but Fitch is optimistic that revenues will remain stable.

• PowerShares Aerospace and Defense (PPA): down 9.3% year-to-date; Lockheed 6.7% of assets; Boeing is 6.6%

A major makeover within the nation’s defense systems would mean Pentagon chief would slash many giant weapons programs, and dissolve the thousands of jobs that go with them, reports Anne Gearan for the Associated Press. The contractors who are protecting their jobs are adding fuel to the fire, says Steve Chiotakis for MarketPlace. Gates’ proposed $534 billion budget for the coming year would face several cuts, and Congress may not approve.

Overall, aerospace and defense equities reflect concerns over demand for air travel and the trajectory of the U.S. defense budget following a wind-down in Iraq. Backlogs, solid balance sheets and smaller enterprises should allow many firms to manage the risks involved. The aerospace and defense group modestly underperformed the broader market over the past five trading days, shedding 1.4% in market value versus a small 0.2% increase in the S&P 500, reports Howard A. Rubel for Barron’s.

• iShares Dow Jones Aerospace & Defense (ITA): down 11.5% year-to-date

• PowerShares Aerospace & Defense (PPA): down 10% year-to-date