Strong third-quarter earnings reports given by leading technology companies this far may prove to be a strong sign of recovery in technology-related exchange traded funds (ETFs) and the economy as a whole.

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.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.