By James Langton
(March 13 – 13:00 ET) – It looked like unlucky 13 was rearing its head on the open this morning. Stocks opened deeply down. But much of the selling abated by midday and markets are struggling toward recovery. The sell-off started in Asia as valuation concerns hit their tech-fuelled markets and some poor Japanese economic data spooked traders. U.S. equity futures hit their downside limits before the open and traders braced for the worst. But after a flurry of aggressive profit-taking the bargain hunters are rooting around bidding stocks back.
The TSE is still down, although just 33 points to 9,454. Volume has been strong at 119 million shares. Lots of penny stock buying has the volume 3:2 in favour of buyers although decliners are ahead of advancers about 6:5.
Only three TSE groups are down at midday, although they are influential tech groups, led by the consumer products and utilities, followed by industrials. It’s the hot stocks that have taken a beating, with software, biotech and engineering taking a thumping.
High-priced tech stocks have been shaved. 724 Solutions dropped 5% or $14. Ballard Power is down 7%, Descartes Systems is off 9%. PRI Automation, Sierra Wireless, BCE Emergis and QLT Photottherapeutics are down. Intertape Polymer has dropped 28% after revealing that it underbilled customers in the midst of transitioning to Y2K-compliant systems and will post poor results in the most recent quarter.
The BCE-Nortel mafia has been throwing its weight around this morning. CTV is up 70¢ on strong volume, 1.6 million shares, after it was announced that BCE has upped its bid for the firm, thereby wooing it to submit to the bid. BCE also threw in a bid for CTV’s biggest shareholder, Electrohome, just to seal the deal. Electrohome is up 16% on the bid. BCE is down 2.5% on 1.4 million shares.
Nortel meanwhile is spinning off its NETGEAR subsidiary. the firm offers Internet infrastructure solutions to small business. It has also received a US$15 million equity investment from Pequot Capital.
In other news the Toronto Stock Exchange has halted troubled animator CINAR “indefinitely” while regulators, police and auditors try and sort of the company’s situation. Bombardier is active again, trading 4.9 million shares, up 25¢. No news from the firm. Golds, media stocks and financials are all up strongly in the face of the tech rotation.
CDNX is down slightly, off just eight points to 4,446. Volume has been heavy at 68.4 million shares. Tech stocks are the big losers here too, while energy stocks are off slightly and miners are up. McCarthy Corp. PLC is the strongest trader up to 25¢ on 3.5 million shares.
In the U.S., the Dow has reversed course after a deeply negative opening. It is now up about 27 points to 9,956. The Nasdaq is still down, but well off earlier lows. On the day it has dropped 78 points to 4,971. The S&P is down just four points to 1,391.