By James Lnagton

(February 18 – 13:00 ET) – Markets shrugged off the inflation-mongering comments made yesterday by U.S. Federal Reserve Board chairman alan Greenspan. Today they seem to be sinking in. Despite more positive inflation data this morning markets are generally down. The TSE 300 is down 20 points to 9,443 at midday.

Volume is strong at more than 159 million shares, about 2:1 in favour of buyers. Decliners are outpacing advancers 11:10. Yet the market is seeing new highs outnumbering new lows about 5:3.

Energy stocks are leading the selling. They’re off about 2%. Miners and utilities are also off notably. Industrials are down slightly, but technology is generally holding up a little better. Financials are leading the upside on strong results out of TD and CIBC, and a possible acquisition by RBC. Golds and merchandisers are also doing well.

Penny stocks are continuing to rage on the TSE, with the miner-turned-tech stock category leading the trade. Vengold is up 8.5% on 16.7 million shares. Aurado Exploration has added 20% on 10.4 million shares. William Resources is up 20% too on 8.2 million shares.

St. Laurent Paper is up 10% on more than 2 million shares on news that it is in talks about a possible merger.

On the downside BCE Emergis is off 3%, Informission is down 6.6%. Teklogix and JDS Uniphase are down too. Despite these sliders Ballard Power, Sierra Wireless, 724 Solutions and Tundra Semiconductor are all rising strongly. George Weston is up 6% on some strong volume too.

Precision Drilling is reporting fourth quarter earnings of 34¢, up from 25¢ in the period last year.

The small caps are marching higher toward the 3,500 mark. The CDNX is up 23 points to 3,477 on strong volume of 62 million shares. Despite the big caps sliding energy stocks the sector is leading the way on the CDNX, thanks to Maxy Oil & Gas up 105% on 4.9 million shares. Miners and techs are down on the day.

In New York stocks are taking it on the chin too, although the techs are holding up better than the cyclicals. The Dow is down 142 points to 10,372. At the Nasdaq market site there are computational problems with the index calculations, although the individual stock quotes appear to be OK. At last check the Nasdaq index was down 14 points to 4,535, but the index calculation is otherwise currently unavailable. The S&P is down 18 points to 1,370.