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.

Apple’s (NasdaqGS: AAPL) iPhone may be threatened by Motorola’s (NYSE: MOT) Droid, a smartphone serviced on Verizon’s (NYSE: VZ) network and powered by Google’s (NasdaqGS: GOOG) Android 2.0 operating system, according to The Week. (The smartphone push in China).

John Herman of Gizmodo believes that the iPhone is already so entrenched in the consumer world that it will still have a dominating presence. David Coursey of PC World argues that the Droid’s practical features are a good lure for consumers looking for something not already on the market.

MG Seigler at TechCrunch sees that Google isn’t trying to undermine iPhones, but rather sell its operating system, which works on a range of different devices. (Four reasons to watch global telecom).

Many are arguing that the Droid is the most sophisticated mobile device from a hardware standpoint to hit the market, reports Michael Arrington for The Washington Post. The Droid smartphone may be as thin or thinner than the iPhone 3GS, with a slide out physical keyboard and removable battery.

For more information on the technology sector, visit our technology category.

• Vanguard Telecom Services (NYSEArca: VOX): up 13.2% year-to-date; Verizon is 20.3%

• iShares Dow Jones U.S. Technology (NYSEArca: IYW): up 46.4% year-to-date; Apple is 9%, Google is 6.5%

• iShares S&P Global Telecommunications (NYSEArca: IXP): up 5.7% year-to-date; AT&T is 15.3%; Verizon is 8.2%

• Technology Select Sector SPDR (NYSEArca: XLK): up 35.5% year-to-date; Apple is 7.7%; AT&T is 8.9%; Google is 4.8%; Verizon is 4.5%

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

Max Chen contributed to this article.

Positive earnings from the tech sector lifted some spirits:

• Amazon (Nasdaq: AMZN) reported a 69% increase in its third-quarter profit, fueling hopes that the holiday season could be a good one for online retailers, reports Geoffrey A. Fowler for The Wall Street Journal.
• Microsoft (Nasdaq: MSFT) reported that cost-cutting helped deliver forecast-beating profits. The software giant also stated that consumer demand was strengthening.

Technology Select Sector SPDR (NYSEArca: XLK) is up 38.6% year-to-date; Microsoft is 9.9%

Existing home sales shot up 9.4% in September, handily beating estimates. It was also the largest monthly gain in 26 years, reports Alan Zibel for the Associated Press. Much of the increase is being attributed to homebuyers scrambling to purchase a home before the government’s tax credit for first-time homebuyers ends. SPDR Dow Jones REIT (NYSEArca: RWR) is up 17.7% year-to-date. (Visit our real estate category for more stories on the housing market.)

Federal Reserve Chairman Ben Bernanke urgedCongress this morning to push through financial reform. The central bank is also taking its own steps  to fix the wounded system, reports Michael S. Derby for The Wall Street Journal.

Meanwhile, the U.S. Treasury and Federal Reserve have unveiled new rules aimed at capping executive pay. While it doesn’t cap pay levels at any specific institution, it still has broad reach, reports Steven Sloan at Insurance Networking. The Fed that 28 large financial institutions to a review of their policies. (For more on the financial sector, visit our financial category).

Although several sectors have notched strong third-quarter performance, the ones listed below are among the standouts. For more stories on sector ETFs, visit our sector ETF category.:

1. Technology. Apple (Nasdaq: AAPL) is the latest big tech name to post strong earnings. The maker of the popular iPhone posted a 47% gain in profit, taking investors and analysts by surprise. Shares were up 5.4% as of Tuesday, reports Jessica Mintz for the Associated Press.

Other technology companies posted strong earnings, as well. (Read about them here).

• Technology Select Sector SPDR (NYSEArca: XLK): up 40.3% year-to-date; Apple 8.1%

• FirstTrust NASDAQ -100 Tech Index (NYSEArca: QTEC): up 67.6% year-to-date; Apple 2.7%

2. Pharmaceuticals. The sector came out a winner in the health care bill that went through the finance committee last week. Pfizer (NYSE: PFE) reported a 26% higher profit, but lower sales. The world’s largest drug maker posted net income of $2.88 billion, or 43 cents a share, even as many patents have been expiring, reports Val Kennedy for MarketWatch.

• iShares Dow Jones U.S. Healthcare (NYSEArca: IYH): up 14.2% year-to-date; Pfizer is 10.6%

• Vanguard Health Care (NYSEArca: VHT): up 15.3% year-to-date; Pfizer is  7.5%

3. Fast Food. McDonald’s (NYSE: MCD) and Yum Brands (NYSE: YUM) have weathered the recession nicely, as price-aware consumers stop going out to sit-down restaurants. Yum Brands has continues to thrive; its third-quarter earnings rose 18% thanks to lower costs that helped the company earn a profit in both the United States and China. McDonald’s announces earnings on Thursday.

• PowerShares Dynamic Food And Beverage (NYSEArca: PBJ): up 10.8% year-to-date; Yum 4.7%; McDonald’s 4.5%

Recent gains in the technology sector are attributed to improved results and upgrades in Google Inc. (NasdaqGS: GOOG), Advanced Micro Devices (NYSE: AMD) and Intel Corp. (NasdaqGS: INTC), reports Benjamin Pimentel for The Wall Street Journal.

Additionally, some solid earnings have emerged from the sector in recent days:

• Intel reported better-than-expected quarterly profits, along with revenue ahead of previous projects. Intel is considered by many as a bellwether for the technology sector and economy as a whole. (Read more about semiconductors).
• Google announced a 27% increase in third-quarter profits, beating analysts’ expectations. A recovering economy upped demand for online ads and e-commerce, the search engine giant said.
• IBM (NYSE: IBM) reported that its earnings rose 14% from the same period last year, surpassing expectations.

A rash of mergers and acquisitions have been seen in the technology sector, and an industry group is forecasting more. As the economy recovers, the firm says, technology companies will no longer hesitate to acquire other companies. Year-to-date, 48 companies have been acquired. In all of 2008, 45 acquisitions took place, Reuters reports.

For more information on the technology sector, visit our technology category.

• Technology Select SPDR (NYSEArca: XLK): up 40.4% year-to-date; INTC is 4.8%, GOOG is 4.8%

• iShares Dow Jones U.S. Technology Sector Index Fund (NYSEArca: IYW): up 52.8% year-to-date; INTC is 6.0%, GOOG is 6.5%

Max Chen contributed to this article.

Cisco Systems (Nasdaq: CSCO), IBM (NYSE: IBM), AT&T (NYSE: T), Intel (Nasdaq: INTC) and many others are all involved in a grand modernization plan for America’s “Smart Grid,” writes David Fessler for Investment U.

The National Institute of Standards (NIST) recently prepared the standards that the Commerce Department wants implemented for the electrical power grid. The plan details the integration and connection of smart meters, including data sharing on energy usage among utilities and cyber-security standards.

NIST requires internet-protocol (IP) technology in systems connected to the “Smart Grid.” This is good news for Cisco, a leader in IP technology. One potential problem with IP technology, however, is the vulnerability to hacking.

The Obama administration has earmarked $4.5 billion for the “Smart Grid” project and the beneficiaries include Cisco, IBM, AT&T and others.

• Technology Select Sector SPDR (NYSEArca: XLK): up 33.1% year-to-date; T is 8.1%, CSCO is 6.6%, IBM is 8.6%, INTC is 4.6%

• iShares Dow Jones US Technology (NYSEArca: IYW): up 43.4% year-to-date; IBM is 9.1%, CSCO is 7.3%, INTC is 6.5%

For more information on the technology sector, visit our technology category.

Max Chen contributed to this article.

Technology

Technology continues to be a hot topic with investors for some of the following reasons:

• Consumers love and rely on technology, and they insist on name brands regardless of the economy; just look at sales of the newest iPhone, and we’re in a recession
• Moody’s recently upgraded the sector to “stable”
• NASDAQ is outperforming other indexes year-to-date; it’s up 33.3% while the S&P 500 is up 16.5% and the Dow is up 10.3%
• Semiconductor and PC demand are expected to stabilize this year and then surge in 2010

Nat Worden for The Wall Street Journal suggests taking a look at the SPDR Technology Select Sector (NYSEArca: XLK),which is up 36% year-to-date.  XLK tracks 85 technology companies, has nearly $3.7 billion in assets and enables one to grab exposure to tech giants such as Microsoft (Nasdaq: MSFT) and Apple (Nasdaq: APPL).

The iShares Dow Jones U.S. Technology Sector Index Fund (NYSEArca: IYW) which is up 46.4% year-to-date and includes heavy exposure to MSFT and APPL, as well.

The PowerShares Dynamic Technology (NYSEArca: PTF) which is up 30.7% year-to-date and includes exposure to MSFT, APPL and more.

The First Trust NASDAQ-100 Tech Index (NasdaqGM: QTEC) which is up 62.3% year-to-date and includes equal-weighted exposure to the technology stocks that make up the Nasdaq 100.

For more stories on technology, visit our technology category.

Kevin Grewal contributed to this article.

The technology sector is booming today on the news of two big names in the industry:

• Intel (INTC): Intel Corp. raised its third-quarter revenue forecast above Wall Street’s expectations Friday, based on strong chip demand. This is giving a good indicator that the business is growing and improving, reports Barbara Ortutay for Associated Press. Intels’ shares were up 5% as of morning trading.

• Dell (DELL): The personal computer industry is healthy, as Dell is posting decent second quarter results. Profit fell 23% and sales fell 22% in the May-July period. The results beat Wall Street’s forecasts, however, sending the shares up more than 6%, reports Jordan Robertson for Associated Press.

If you bought shares in Apple (AAPL) or Microsoft (MSFT) in the early days, you were handsomely rewarded for your choice. However, what are the chances that most investors would pick one company in a sector of hundreds and have it pay off so well? ETFs can give investors a safe and cost-effective method to invest and play the sector as technology rises higher, says Ron Rowland for The Market Oracle.

With tech ETFs, you don’t have to choose just one or two companies, and you can get broad exposure at a low cost.

• Select Sector SPDR (XLK): up 32.4% year-to-date

• iShares Dow Jones U.S. Technology (IYW): up 41.8% year-to-date

• iShares S&P North American Tech Software (IGV): up 31.7% year-to-date

For more stories about technology, visit our technology category.

The Reuters/University of Michigan Surveys of Consumers reported that its final index of confidence for August fell to 65.7 from 66.0 in July, the lowest level it has been at in the past four months.  In fact, according to the report, consumers ranked economic conditions the worst since the market’s “bottom” in March.  The good news is that the index beat analysts’ expectations of 64.5 and is above this month’s preliminary reading of 63.2, Reuters reports.

In the technology world, chip-maker Intel (INTC) increased its third-quarter revenue forecasts above Wall Street’s expectations as demand for microchips increased, indicating that business is improving.  The Santa Clara, CA-based firm announced expected sales of $8.8 billion to $9.2 billion for the quarter, up from an original anticipation of $8.1 billion to $8.9 billion and ahead of $8.55 billion analysts expected.

Additionally, Dell (DELL), the nation’s second-largest personal computer maker, announced that although consumers are coming back to the market, corporations are holding off purchasing new hardware as they continue to implement lean measures.  The Texas-based company stated that it doesn’t expect to see a turnaround in corporate business until next year.  The news from both companies sent the Technology Select Sector SPDR (XLK) up nearly 0.4% in morning trading.

Although the global economy appears to be recovering, things are not easing up in the Asia-Pacific region as the world’s second-largest economy reported the highest unemployment rate since World War II.  According to a report released by Japan’s Ministry of Internal Affairs and Communications, the nation’s unemployment rate hit 5.7% in July, a 40.2% jump from the prior year.  Additionally, Japan’s average monthly income per household declined by 2.4% in nominal terms., states John Letzing of MarketWatch.  The news sent the iShares MSCI Japan Index (EWJ) down 0.2% in morning trading.

The Dow Jones Industrial Average lost 0.9%, the S&P 500 was down 0.7% and the Nasdaq gave up 0.4% in morning trading.

For more stories on Japan, visit our Japan category.

Kevin Grewal contributed to this article.

Microsoft (MSFT) and Yahoo (YHOO) have reached a 10-year web search deal and advertising partnership after years of speculation about a delay. Microsoft is the world’s biggest software firm and Yahoo is the leading online portal, and together, they could create a major rival to Google (GOOG).

The alliance may be a boon to both companies. The Economist explains that Microsoft will significantly increase the use of its search service, Bing, as well as its online advertising platform. This means Yahoo will no longer need to spend money on its search and ad technologies.

Here are more highlights, according to Barry Schwartz for Search Engine Land:

• Microsoft will acquire an exclusive 10-year license to Yahoo’s core search technologies, and Microsoft will have the ability to integrate Yahoo search technologies into its existing web search platforms.
• Microsoft’s Bing will be the exclusive algorithmic search and paid search platform for Yahoo sites. Yahoo will continue to use its technology and data in other areas of its business.
• Yahoo will be the sales force for both companies premium searches, however, each company will maintain its own separate display advertising business and sales force.

After regulatory approval, the deal will be in place and in working order by 2010.

ETFs may be the best play on this deal, because questions still remain about its ultimate impact. Will Google continue to thrive, or will this new alliance shrink its search engine market share? An ETF can cover all your bases.

• Technology Select Sector SPDR (XLK): up 29% year-to-date; Microsoft 10.3%; Google 4.9%; Yahoo 1.3%

• iShares Dow Jones U.S. Technology (IYW): up 37.8% year-to-date; Microsoft 12.2%; Google 6.5%; Yahoo 1.3%

For more stories about technology, visit our technology category.

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