The Labor Department has reported that the number of newly laid-off workers last week dropped to 512,000, the lowest point since January. It’s also 4,000 fewer than what economists had forecast. The report has a downside, though: worker productivity in the third quarter rocketed by 9.5%. This means that employers are becoming more efficient and more productive, so companies will have little reason to hire more, report Martin Crutsinger and Christopher S. Rugaber for the Associated Press.

The European Central Bank kept interest rates at a record low today, as expected. Later, the bank’s president will hold a press conference that many expect will give hints as to when the ECB will begin to cut back on bank lending and whether it intends to charge them more for 12-month money, reports Jana Randow for Bloomberg. iShares MSCI EMU (NYSEArca: EZU) is up about 1.5% this morning. (How Europe can keep the ball rolling).

The outlook for retailers brightened somewhat in October. Chain-store sales notched their second consecutive gain, and it was the best performance for the industry in more than a year. The industry reported an overall 1.8% sales jump at stores open for at least a year, reports Stephanie Rosenbloom for The New York Times. Not entirely surprisingly, chains that sell designer brands at a discount were the strongest performers. SPDR S&P Retail (NYSEArca: XRT) is down about 0.7% this morning. (Brand names boost consumer staples).

Climate legislation received a boost today as Senate Democrats received approval of a cap-and-trade bill that aims to reduce U.S. greenhouse gases. Republicans object to the legislation because they feel that it’s being rushed, reports Simon Lomax for Bloomberg. The House bill seeks to reduce emissions by 17% below 2005 levels by 2020; the Senate bill is calling for a deeper cut of 20%. iShares S&P Global Clean Energy Index (Nasdaq: ICLN) is up nearly 2% this morning.

For full disclosure, Tom Lydon’s clients own shares of EZU.

Energy demand around the world is rising, making it an ideal time to address where nuclear power fits into the equation. There are about 70 new plants under construction globally, and there could be more as the world searches for a clean-energy solution. (Will nuclear stocks and ETFs be able to benefit from the talks?)

Hannah Fairfield and Karl Russell for The New York Times report that many companies are concerned that the credit crisis has dealt a critical blow to nuclear power in the United States, which had been perceived as undergoing a renaissance since 2004. (Why nuclear is gaining favor).

There are about 26 plants under construction in the United States right now, but most of the action is coming from overseas. Companies that design reactors, such as General Electric (NYSE: GE), are experiencing rapid growth as Emerging Asia and Europe seek out their business. (Learn more about this sector).

For more stories about nuclear energy, visit our nuclear energy category.

• PowerShares Global Nuclear (NYSEArca: PKN): up 21.3% year-to-date

• Market Vectors Nuclear Energy (NYSEArca: NLR): up 15.8% year-to-date

• iShares S&P Global Nuclear Energy (NYSEArca: NUCL): up 28.3% year-to-date

The Obama Administration has announced that it’s investing $3.4 billion in order to fund this project. Through the plan, 100 private companies, utilities, cities and manufacturers will receive grants ranging from $400,000 to $200 million in order to build a smart energy grid, reports Lynn Sweet for The Chicago Sun-Times. So far, these awards are the largest Recovery Act awards ever made on one day. (Nine things that could affect alternative energy).

Analysis shows that by getting smart grid technology off the ground, it could reduce electricity use by at least 4% by 2030. This would result in savings of $20.4 billion for both businesses and consumers. (Does this mean alternative energy is not so alternative anymore?)

The Senate environment committee also released details of its climate change legislation, which includes the share of “emissions allowances,” which is revenue that comes from regulation of a cap-and-trade system – once it’s in place. The Senate has nearly tripled the share of allowances set aside by the House for transit, inter-city rail, and other efforts to trim transport-based emissions. Elana Schor for Streetsblog reports that the Senate measure would set aside more than 3% of allowances in the first two years of the cap-and-trade system for limiting pollution from the transportation sector.

For more stories about clean energy, visit our alternative energy category.

• First Trust NASDAQ Clean Edge Green Energy (Nasdaq: QCLN)
• iShares Dow Jones U.S. Utilities (NYSEArca: IDU)
• iShares S&P Global Infrastructure (NYSEArca: IGF)
• iShares S&P Global Clean Energy (NYSEArca: ICLN)
• PowerShares WilderHill Clean Energy (NYSEArca: PBW)
  
• PowerShares Global Clean Energy (NYSEArca: PBD)
• PowerShares Cleantech (NYSEArca: PZD)
• PowerShares Dynamic Utilities (NYSEArca: PUI)
• Utilities Select Sector (NYSEArca: XLU)
• Vanguard Utilities (NYSEArca: VPU)
• SPDR FTSE/Macquarie Global Infrastructure 100 (NYSEArca: GII)

All over the world, governments have set aside money for the green energy sector to help get their economies on course, writes Charlie Thomas for FTAdviser. The combined allotment for “green money” in global stimulus packages may be more than $500 billion.

Earmarked funds are being spent on climate change-related investments, such as improvements to railway, grids and water infrastructure.

• The European Recovery Plan involves investments in energy, including offshore wind and carbon capture and storage.
• The American Recovery and Reinvestment Plan will improve renewables, building efficiency, low-carbon vehicles, mass transit, grids and water.
• In December, a climate change meeting in Copenhagen will try and bring more countries, such as China and India, into the environmental accord. Energy efficiency and alternatives will also be addressed. Even if a global agreement on key issues is not met, individual countries will likely continue on with their own projects.

Green technology is becoming popular, but investors should be wary of a possible “green” bubble that could form as a result of hype. (Read how to protect yourself from bubbles). This sector is more of an emerging technologies sector, and investors should note the possible high volatility and risks involved. Find out how to follow trends here.

For more information on green energy, visit our alternative energy category. Among the many ETFs to choose from in this sector include:

• Market Vectors Global Alternative Energy (NYSEArca: GEX): up 7.8% year-to-date

• iShares S&P Global Clean Energy Index Fund (NYSEArca: ICLN): up 7.4% year-to-date

• Claymore/MAC Global Solar Energy (NYSEArca: TAN): up 12.7% year-to-date; FSLR is 10.8%

• iPath Global Carbon ETN (NYSEArca: GRN): down 5.1% year-to-date

• PowerShares Global Wind Energy (PWND): up 38.8% year-to-date

Max Chen contributed to this article.

According to Rebecca Lefton, Andrew Light and Daniel J. Weiss for American Progress, the International Climate Change Negotiations dispelled the myths and revealed the truths about how the world is responding to global climate change:

• Both China and India are planning for emissions reduction and low-carbon development. China is considering raising fuel economy standard for passenger cars to 42.2 mpg from current 36.7 mpg. China is also trying to reduce energy intensity, or energy consumption per unit of GDP, and increase generation of renewable energy. India is planning the most ambitious solar energy goal in the world and has taken steps toward quantifying greenhouse gas emissions.
• Both China and India have agreed to sign new climate agreement so long as it doesn’t inhibit economic growth. Both countries have ratified the Kyoto Protocol and have acknowledged “the scientific view that the increase in global average temperature above pre-industrial levels out not to exceed 2 degrees C.”
• Developing countries do not need to accept binding targets on gas emissions because they have different needs. A majority of global citizens live in poverty and should not be obligated to the same guidelines as developed countries. These developing countries will likely consider future caps.
• Measuring, reporting, and verifying emissions reductions will be accountable by developing and developed countries. China has developed fairly detailed range of quantifying energy and environmental policies. Whereas, developing countries are still improving measurement, reporting and verification capacities.
• Domestic climate legislation and investments in a clean energy economy will help the United States in the clean energy race by boosting job creation and the economy. The American Clean Energy Security (ACES) Act will generate 1.7 million jobs. The act has provisions to assist energy-intensive, trade-sensitive industries competing with firms from countries without reduction plans.
• The U.N. Climate Change Conference slated for December in Copenhagen is part of a process for structuring an international agreement. Upon its success, there will be a new treaty to replace the Kyoto Accord.
• Present mid-term emissions reductions proposals coupled with complementary measures will allow the United States to equal targets to those of other developed countries.
• The United States has already gone forward to reduce greenhouse gas pollution before any potential agreed upon worldwide commitment at the UNFCC meeting in December. Efforts in reducing emissions and investing in renewable energy at the state and federal level have already taken place.
• The E.U. Emissions Trading System has helped reduce pollution by 50 to 100 million metric tons of carbon dioxide per year. The program initially led to windfall profits from polluters, with price spikes for consumers, but revisions has made the program more successful.

• PowerShares Wilderhill Clean Energy Portfolio Fund (NYSEArca: PBW): up 24.7% year-to-date

• Market Vectors Global Alternative Energy (NYSEArca: GEX): up 7.9% year-to-date

For more information on green energy, visit our alternative energy category.

Max Chen contributed to this article.

Investors still have to decide on which industries are best positioned to perform well in the recovery, remarks Matt Krantz for USA Today. Possibly the worst thing any investor could do is jump in after sectors that have already gained, continually chasing performance.

After betting on financials and tech companies, investors are now looking for actual economic growth in the second half of the year, especially in consumer discretionary companies that make big-ticket items such as automobiles and appliances. Krantz notes, however, that investors are applying prudent techniques when picking out future winning sectors:

History. Certain sectors and certain companies do better at certain points of an economic cycle. If the past repeats itself, solid performance could come out of consumer discretionary stocks, along with materials and industrial companies. These “cyclical” sectors could gain as demand for goods picks up. Later, energy stocks could gain as companies expand to cover all the demand.

• Consumer Direct Select Sector SPDR (NYSEArca: XLY): up 30% year-to date
• iShares Dow Jones U.S. Basic Materials (NYSEArca: IYM): up 55% year-to-date
• SPDR Select Sector Fund- Basic Industries (NYSEArca: XLB): up 43% year-to-date
• Energy Select Sector Energy Fund (NYSEArca: XLE): up 17.7% year-to-date

Cycles. Growth in revenue is still down and may continue to be so in the third quarter, but some businesses could show early growth. The businesses that will perform will be the ones to stop cost cutting and start expanding. This is one of the reasons why financials may continue to benefit as demand for loans increases.

• SPDR Financial Select Sector (NYSEArca: XLF): up 23.3% year-to-date

Diamonds in the rough. Some small banks and brokers may stand out by enticing customers who have become estranged from large financial firms. Modernization of bridges and roads will lead to a boom in the infrastructure industry. Government investment into green tech will also likely help the alternative energy industry. As more companies use the internet to conduct business, business that build internet networking systems may also become in demand.

• iShares S&P Global Infrastructure (NYSEArca: IGF): up 13.8% year-to-date
• PowerShares Wilderhill Clean Energy Portfolio Fund (NYSEArca: PBW): up 28.9% year-to-date
• iShares Networking Fund (NYSEArca: IGN): up 61.7% year-to-date

Not so good. Sectors dependent on consumers may not see previous cash flows for awhile yet. Businesses such as retailers, restaurants and casinos may also continue to struggle.

Watch the trends. There’s no such thing as a “sure thing” in the markets, otherwise no one would ever lose anything. We can all guess which sectors will perform and which won’t, but reality could bear out differently. Watch the trend lines to spot the true opportunities, and have a stop loss in place, as well.

Max Chen contributed to this article.

Chu believes that the 30%-40% emission reduction goal in the United States is an aggressive but technically possible goal. Matthew McDermott for TreeHugger reports that developing nations such as China, Brazil and India are calling on the United States to make these changes happen.

The big business and politics in the United States makes what is politically achievable (in terms of emission reduction commitments) far, far lower than what it is other nations. Foon Rhee for Political Intelligence reports that Rep. Edward J. Markey (D – Mass.) supports the Obama administration for their latest higher fuel efficiency and emissions requirements for cars and tracks. The proposed standards include:

• The auto industry’s fleet of new vehicles to average 35.5 miles per gallon by 2016.
• Vehicle model years 2012 through 2016 are included and allow automakers to comply with all federal requirements as well as standards pushed by California, Massachusetts, and about a dozen other states.
• The consumer demand for fuel-efficient cars was evident in the “cash for clunkers” program. The bill will help keep showrooms stocked with these vehicles.
• The administration estimates the requirements would cost up to $1,300 per new vehicle by 2016, but would save the average driver $3,000 in fuel costs over the life of the vehicle.
• The new standards would save 1.8 billion barrels of oil over the lifetime of the vehicles purchased during 2012-16 and would cut global warming pollution by 950 million metric tons of total carbon dioxide equivalent emissions, according to Markey’s office.

The Green Investor on Seeking Alpha has some ways to invest in the green movement, and capture some of the effects of the recent legislation:

• Market Vectors Global Alternative Energy (NYSEArca: GEX): up 13.8% year-to-date

• PowerShares Cleantech Portfolio (NYSEArca: PZD): up 33.2% year-to-date

• iShares S&P Global Clean Energy Index Fund (NYSEArca: ICLN): up 13.2% year-to-date

For more stories about green energy, visit our alternative energy category.

Specialty-sector ETFs, or “thematic” ETFs, have become a hit with investors, covering more than 40 unique themes in the market with more than $10 billion in assets under management, according to IndexUniverse.

While some consider thematic ETFs “gimmicky” and believe these forms of ETFs are only popular when the media is hyping the sector, they have their advantages and an investor should be aware that such options are available.

Specialty ETFs can help round out a portfolio and allow investors to take advantage of different segments of the market. To spot opportunities, watch the trend lines.

Alternative energy. Skyrocketing energy prices have brought more investor interest to all sorts of energy investments. The largest alternative energy ETF is PowerShares WilderHill Clean Energy Portfolio (NYSE Arca: PBW), currently up 23.4% year-to-date, with $743 million in assets under management. PBW is more focused on U.S.-listed companies.

Coal. The cheapest energy source of BTUs. Ever-increasing oil prices are encouraging the development of the coal. The largest coal ETF is Market Vectors Coal ETF (NYSE Arca: KOL), currently up 1.3.4% with $277 million in assets. KOL primarily includes mid-cap miners, weighted 49% in U.S. companies, 23% in China and 15% in Indonesia.

Nuclear. Once operational, nuclear power is seen as the cheapest kind of energy, but the industry is still grappling with the issue of nuclear waste. The largest nuclear ETF is Market Vectors Nuclear Energy ETF (NYSE Arca: NLR),  currently up 21.7% year-to-date, with $166 million in assets. NLR has a 40% allocation to uranium miners, with other weightings in power generation and plant construction firms.

Commodities. ETFs are an easy way for a commodity trader to access this area of the market. The largest hard asset commodity ETF is Market Vectors Agribusiness ETF (NYSEArca: MOO), currently up 40% year-to-date, with $1.5 billion in assets. Other areas include water resources, steel, timber and broad-based commodities.

Infrastructure. Infrastructure covers companies involved in construction and repair of roads and bridges, building and maintaining power grids, telecommunication networks and sewage systems. Worldwide stimulus funds have been steadily injecting more money into the sector. The largest infrastructure ETF is iShares S&P Global Infrastructure Index Fund (NYSE Arca: IGF), currently up 12.9% year-to-date, with $267 million in assets.

Transportation. There’s no denying the economic impact of transport systems. The Claymore/Delta Global Shipping ETF (NYSE Arca: SEA) is currently up 25.9% year-to-date, with more than $70 million in assets. SEA is a good indicator for economic activity and commodities demand.

Green. The green sector provides environmentally-friendly technology for an evolving society. The largest green ETF is PowerShares Cleantech Portfolio (NYSE Arca: PZD), currently up 29.8% year-to-date, with $145 million in assets. PZD tracks the performance of companies whose products improve productivity while reducing consumption of natural resources.

Other. Or “miscellaneous” category that includes gaming, luxury items and Chinese real estate to name a few. The largest ETF in this area would have to be Market Vectors Gaming ETF (NYSE Arca: BJK), currently up 46.7% year-to-date, with $108 million in assets. BJK tracks global gaming companies.

Max Chen contributed to this article.

Why?

• Solar energy is becoming cheaper and more efficient to make through advances in solar panel technology. The industry is developing a new thin-film panel technology that will soon replace the limited capacity produced from polysilicon panels. Panel efficiency is currently around 9%, but efficiency should reach 18% to 20% in a few more years, which will likely make solar panels the cheapest source of energy.

• Government subsidies are enticing more citizens to begin residential solar installations, writes David Fessler for Investment U.

• Retailers are also experimenting with solar panels to cut down costs by placing panels over large stores and warehouses. Wal-Mart (NYSE: WMT) is one such retailer experimenting with this, and if it goes as planned the store could become one of the largest U.S. power producers.

• China is still aiming to become one of the world’s solar leaders. First Solar Inc. (NasdaqGS: FSLR) and Ordos City agreed to build a 2-gigawatt solar installation in Inner Mongolia city, reports Patrick O’Grady for Sacramento Business Journal. The deal will start off as a 30-megawatt demonstration unit starting in June and additional phases will be online by 2014 and 2019.

Ordos officials have allotted 65 square kilometers of land for the project and they will be working in construction and financing with First Solar. The company will be operating the plant under China’s feed-in tariff, which guarantees prices paid for renewable energy.

• Market Vectors Solar Energy (NYSEArca: KWT): up 6.1% year-to-date; FSLR is 8.8%

• Claymore/MAC Global Solar Energy (NYSEArca: TAN): up 12.4% year-to-date; FSLR is 10.8%

For more information on solar power, visit our solar category.

Max Chen contributed to this article.

Climate change legislation has everyone wondering what its passage could mean to them. Steve Gelsi for MarketWatch explains that the executive types will have to cope quickly with carbon cost, rules and benefits associated with their products and services, while consumers will be reminded of the carbon footprints their purchases made during production.

The American Clean Energy and Security Act aims to cut emissions from 2005 levels by 17% in 2020 and 83% by 2050.

Verification, trading platforms, and new technology are all presenting new challenges and opportunities for companies and entrepreneurs.

Wall Street firms are ramping up their brokerage operations in order to accommodate the new market for carbon offsets and investment tools that access them, such as the current note below:

• iPath Global Carbon ETN (GRN): down 5% year-to-date

The climate change legislation now under consideration in Congress is similar to successful efforts in the 1990s to curb sulfur dioxide emissions by capping them and trading an initial pool of nine million allowances. With the new legislation, the funding is much larger.

For more stories about carbon trading, visit our carbon category.