It's Halloween and the scaring is easy - at least on Wall Street.

Some investors might be quaking in their boots over the rumor - probably more of a likelihood - that Google Inc and Yahoo Inc. will walk away from their search deal by next week. The Wall Street Journal is reporting that the collapse is a done deal, so to speak. Apparently, advertisers hate the proposed merger (they think ad prices will spike upward) and government regulators don't like the deal, with the "m" word - monopoly - popping up in Washington.

Elsewhere, Beacon Equity Research is talking up two potentially viable technology stocks to pick up in a recession: Phantom Fiber Corp. (OTCBB: PHFB) and Sybase Inc. (NYSE: SY). In Beacon's weekly trade alert, the company says that Phantom Fiber’s signing of a multi-year contract with Scientific Games Racing LLC is a winner. This from the alert this morning . . .

“Phantom Fiber Corp. shares maintained yesterday’s 12.50% drop early Thursday, trading at 7 cents. Phantom Fiber is a leading developer of wireless platform software that enables its customers to deliver high-performance applications across global communications networks to mobile users. … The company recently announced the signing of a multi-year contract with Scientific Games Racing LLC to extend the functionality and services of Scientific Games Racing's proprietary Trackplay wagering system to the over 1,500 cellular phones, BlackBerry and PDA device types.”

I'm not sure if betting on the horses, as it were, is a great idea in tough economic times. Who knows? It might be. Horse racing reminds me of hockey, in which there is a core of resilient fans who'll show up no matter what the economic environment looks like. So any technology that makes it easer for track rats to place their bets via cell phones looks like a good wager across the board.

Beacon is also touting Sybase, a particular favorite of mine and one of the rare tech giants to post a gain in Q3. “Sybase Inc. shares increased 2.02% at Thursday’s opening bell, trading at $25.88. Sybase provides enterprise and mobile software solutions for information management, development and integration worldwide. … Primarily due to growth in services, messaging and license fee revenues, the company recently reported its third-quarter profit increased 2%, topping Wall Street estimates and prompting the company to boost its 2008 outlook.”

Sybase is one of those companies that could benefit from a lousy economic environment for the next few months (or longer). More businesses will stick with what they have, information technology-wise, and will stave off any big commercial software purchases. But they will pour money into IT services, where companies like Sybase and IBM should pick a lot of low-hanging fruit.

Another positive sector for tech investors is over in Europe, in the telecom market. On CNBC this morning, Michael Kovacocy, European telecoms analyst and sector strategist from Daiwa Institute of Research Europe, was talking up KPN and Telefonica as being well positioned going into the economic slowdown.

"Telefonica probably has the most upside right now … it's an incredible value. We think that it's now worth upwards of 20 euros a share and we think it’s a long term growth play," Kovacocy said. Overall, the telecom sector could be one of those markets, like IT service, that comes up smelling like a rose in 2009. "Going into this period of turmoil telecoms were in fantastic shape," he said. "The bursting of the telecom bubble in early 2000 prompted the established players to retrench and they have really made themselves quite solid," Kovacocy he added.

Hey, it's Halloween and the frightfest is on. But let's keep it to the trick-or-treaters - and not to Wall Street.