Stocks and many exchange-traded funds (ETFs) lost ground for a third straight day as investors grew increasingly uneasy about a recent move away from riskier assets and into U.S. Treasuries.

As investors moved money out of stocks, they moved money into safer investments like Treasury bills, report Stephen Bernard and Tim Paradis for the Associated Press. The yield on the three-month T-bill today was 0.02%, after falling to a yield of 0.005% late Thursday. In fact, yields briefly turned negative Thursday as demand jumped for this safest of short-term investments. The SPDR Barclays Capital 1-3 Month T-Bill ETF (NYSE: BIL) has a year-to-date return of 0.22%, with a yield of 0.28%. (For more stories on Treasuries, see our treasury bonds category).

Disappointing results from Dell (NASDAQ: DELL), the world’s number-three PC brand, weighed on investor sentiment. Dell is recovering from the global slowdown a bit slower than its competitors because of its reliance on commercial versus consumer business, writes Kelvin Soh for Reuters. Dell did say, however, that PC demand has picked up following the launch of Windows 7 from Microsoft (NASDAQ: MSFT). The Technology Select SPDR ETF (NYSE: XLK) and the iShares Dow Jones U.S. Technology Index Fund (NYSE: IYW) are both just down fractionally for the day. However, Dell’s stock is currently down more than 8%. (For more stories on the technology sector, see our technology category).

Home-building giant DR Horton (NYSE: DHI) said today that orders surged 26% on a unit basis and that it narrowed its fiscal fourth-quarter loss. However, the company did miss analyst estimates and took hefty land-related charges, reports Dawn Wotapka for the Dow Jones Newswires. The company went on say that conditions are still challenging in the industry because of rising unemployment, weak consumer confidence and high inventory levels. The stock is currently down more than 9%, while the SPDR S&P Homebuilders ETF (NYSE: XHB) is down 2% today. (For more stories on the homebuilding industry, see our homebuilders category).

Tony D’Altorio contributed to this article.

The picture of the U.S. consumer has shifted from one of spendthrift to bargain hound, and this new mindset has retailers up in arms as the holiday season approaches. Even if the economy picks up, some retail veterans think it could be 10 to 15 years before pre-bubble consumption returns, reports Jena McGregor for BusinessWeek.

As the third-quarter earnings season closes and the fourth picks up at the start of the year, the truth will be told about the strategies many retailers have used to pick up sales. Some of these tactics include getting creative about managing inventory, adjusting product lines, and dumping an addiction to promotional pricing. (Are retail figures a holiday harbinger?)

Some of the strategies retailers are employing:

• Creating scarcity: Some stores are holding back up to 60% of their inventory to avoid pileups on shelves. As a result, deep discounting won’t be necessary to move products.
• Kicking the discount: Price cuts have become more of a given in order to keep consumers coming back. Promotions are more specialized and big sales and discounts are becoming less common.
• Simple one-stop shopping: Having the right array of products is critical in a world where gaining market share is critical to growth. Chains are moving into new product areas to appeal to more consumers and make operations more efficient.
• Being contrary: Some retailers have taken to expanding and pushing forward rather than pulling back. The reward for some is higher margins and interaction with daily consumers.

A fresh approach may be all that it takes to get some retailers moving again.

For more stories about retail, visit our retail category.

Related ETFs:

• iShares Dow Jones U.S. Consumer Goods Index (NYSEArca: IYK): up 20.1% year-to-date

• SPDR S&P Retail (NYSEArca: XRT): up 81.4% year-to-date

• Consumer Discretionary Select Sector SPDR (NYSEArca: XLY): up 34.5% year-to-date

Kraft Foods (NYSE: KFT) kicked things off by bidding for Cadbury (NYSE: CBY), which declined the offer. Now other names could be lining up, including Hershey (NYSE: HSY), Pepsi (NYSE: PEP), Nestle and Mars. Don Dion for The Street reports that several types of ETFs, from food to consumer staples, can provide exposure and give investors the opportunity to capitalize on this battle.

• PowerShares Dynamic Foods (NYSEArca: PBJ): up 7.3% year-to-date; holds large, top consumer goods companies; Pepsi is 4.2%

• Consumer Staples SPDR (NYSEArca: XLP): up 7.3% year-to-date; highly concentrated holdings and is the largest ETF in the group; with 40 holdings, 66% of assets are given to top 10 companies; Kraft is 4%; Pepsi is 4.3%

• Vanguard Consumer (NYSEArca: VDC): up 9.7% year-to-date; holds 110 companies and tracks closely to XLP; Pepsi is 6.7%; Kraft is 3.5%

• iShares Consumer Goods (NYSEArca: IYK): up 14.3% year-to-date; IYK’s holdings include large, mature firms that offer stable returns, but does not offer any retail exposure that the others do; has a higher expense ratio of 0.48%; Pepsi is 8.8%; Kraft is 3.5%

The bidding over Cadbury could drag on for months, and the attention that it could draw to the sector make these funds interesting buys in the meantime.

For more stories about consumer staples, visit our consumer staples category.

According to a recent study, more American families are going to depend on food donations than ever before. In the past, 17% have had to receive them, while 29% who haven’t believe they may need to at some point soon.

Around two-thirds of Americans believe the United States hunger problem has gotten worse during the past year, reports Hormel Foods Newsroom. The rising food and fuel costs are contributing to this problem. More than 63% of Americans blame the economic situation. Six out of 10 Americans say they’ve had to cut back on the quantity or quality of food they buy. More than half surveyed said they’ve taken cost-cutting steps, such as using more coupons or buying generic.

On another note, even Wal-Mart (WMT) is feeling the pinch. The chain will cut the pace of the number of new store openings taking place across the United States. Brad Dorfman and Nicole Maestri for Reuters report that the world’s largest retailer also said on Monday that it is attracting higher-income shoppers with discounts as the U.S. economy reels from tighter credit, mounting job losses and falling home prices.

The goal of the cutback is to boost sales by remodeling stores and improving merchandise selection. Customers that would never consider Wal-Mart before are finding themselves shopping there.

• Consumer Staples SPDR (XLP): down 21.6% year-to-date; WMT is 10.8%

• Vanguard Consumer Staples (VDC): down 23.5% year-to-date; WMT 9.6%

Falling home values, higher gas prices and more expensive food are just a few reasons Americans are cutting back on spending. During the past few weeks, as Washington and Wall Street have been full of woes, the American consumer has almost disappeared, report Louis Uchitelle, Andrew Martin, and Stephanie Rosenbloom for The New York Times.

The government bailout plan so far does not seem to spur spending at all. The third quarter spending reports are going to shrink, no doubt, for the first quarterly decline in two decades. Many economists, who began the third quarter expecting modest growth, now believe the cutbacks are so severe that the overall economy did not expand either, and they warn that a consumer-led recession could be more severe than the relatively mild one earlier this decade.

Everyone just feels poor these days, as uncertainty about the economy weighs on minds.

ETFs that may reflect this trend:

• SPDR S&P Retail (XRT), down 18.6% year-to-date
• iShares Dow Jones Consumer Goods Sector Index Fund (IYK), down 15% year-to-date

One area that could remain solid is consumer staples, reflected in Consumer Staples Select Sector SPDR (XLP). While the fund is still down 6.7% year-to-date, it’s outperforming other retail funds.

Why is that? Well, consider the following:

• Consumer Staples stocks are less likely to suffer in economic slowdown – people need the basics, after all
• Wal-Mart (WMT), at 11% of the fund XLP – has consistently performed well throughout the economic downturn, due to low prices and appeal to shoppers limiting themselves to the necessities.
• Kraft (KFT) is another top holding, at 3.9%, and is stepping up its efforts to appeal to the value-conscious consumer. They’ve teamed up with Campbell Soup to promote grilled cheese sandwiches and soup – an inexpensive but filling option for people with empty wallets.

The Consumer Price Index fell 0.1% from last month, preceded by two months of increases: 0.8% in July and 1.1% in June.

But economists are cautioning that prices are still much higher than they were at this time a year ago, reports Catherine Rampell for the New York Times. Year-over-year, prices were up 5.4%. The one-month decline in the index might also not be enough to give lasting relief to consumers.

Breaking down the index, energy prices fell 3.1%, and transportation costs fell 1.5%. Stripping out energy and food prices, the core inflation rate was 0.2%.

Energy prices are continuing their descent, based mostly on lower demand: oil is trading below $93 a barrel, reports Stevenson Jacobs for the Associated Press. Gas prices are edging higher after Hurricane Ike shut down refineries in the Gulf of Mexico. The national average is $3.854.

Ordinarily, this report is considered a major market mover, but analysts think that the report is going to be overshadowed by worries about the nation’s financial institutions. As a result, many retail ETFs are reacting much either way.

But Gary Gordon for ETF Expert notes that despite the broader U.S. market having taken a beating this year, the retail ETFs have been anywhere from flat on the year, to down by just single digits. In fact, some of these funds are at or near their 200-day moving averages:

• SPDR S&P Retail (XRT): down 2.7% year-to-date; 0.4% below trendline
• iShares Dow Jones U.S. Consumer Goods (IYK): down 5.3% year-to-date; 1% above trendline
• Vanguard Consumer Staples (VDC): down 0.6% year-to-date; 2.5% above trendline
• Retail HOLDRs (RTH): up 3.5% year-to-date; 2.5% above trendline

The jump in the confidence index was unexpected, and it was the biggest monthly jump since January 2004, reports Steven C. Johnson for Reuters. No doubt, it was the lower gas prices and lower one-year inflation expectations that led to the lightened moods. The one-year inflation is now expected to be 3.6%, down from 4.8% last month.

Wholesale inflation unexpectedly plunged in August by the largest amount in two years, while retail sales remained flat, reports Martin Crutsinger for the Associated Press. Economists expected a decline in wholesale prices of 0.5%, but they fell instead by 0.9%, mostly on falling energy prices.

The retail numbers still show that consumers are cutting back on spending, and it’s contributing to the gloomy mood on Wall Street this morning.

While retail ETFs are down in trading today, several of them have been performing well over the last month:

• SPDR S&P Retail (XRT): up 1% year-to-date; up 7% in the last month
• Retail HOLDRs (RTH): up 7.3% year-to-date; up 4.3% in the last month
• Consumer Staples Select Sector SPDR (XLP): up 1.3% year-to-date; up 1.1% in the last month
• iShares Dow Jones U.S. Consumer Goods (IYK): down 4.4% year-to-date; up 0.7% in the last month

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