TSE continues rally as analyst comment boosts Nortel

Volume remains somewhat soft at 70.5 million shares. It is decidedly positive, more than 2:1 in favour of buyers, but the advance-decline line shows a near dead heat between winners and losers on the day.

Eight of the TSE’s 14 groups are up so far, led by industrials gaining more than 2%. Strength is also evident at the conglomerates and merchandisers, but the inescapable story is Nortel. Toronto’s tech titan is up another 3% this morning in moderate trading, on the heels of vigorous defense of the stock from Wall Street, including a CSFB analyst reiterating his “strong buy” call on the stock this morning. An upbeat report on the chip sector is also boosting most of the major techs.

Techs are carrying trading today, with strong jumps in each of JDS Uniphase, Alcatel, Celestica, C-MAC, Mosaid, Psion and Sierra Wireless.

The weakness is being supplied by the consumer stocks primarily, off more than 3%. Most of the other slides are moderate, although utilities are down almost 1%. Biotechs are taking a big hit. Biovail is down heavily, off 13% on news that a competitor has gained approval to begin production on a generic version of one of the company’s drugs. Also sliding are QLT, NPS Allelix, Ballard Power, Creo, Hummingbird, and BCE Emergis.

One consumer stock that’s rocking the mike today is Corel Corp. On the heels of yesterday’s deal with Microsoft Corp., which saw it take almost 25% in non-voting stock for $135 million, the firm has set up the executive suite today, removing the interim from Derek Burney’s CEO title to install him as president and CEO. It has also appointed four new executive vice presidents to run its product groups. Corel shareholders are rewarding the firm with a 60% jump in its stock on heavy volume of 3.6 million shares.

Gulf Canada remains a top trader, up a nickel today on 9.3 million shares. Yesterday traders dumped on its proposed $2.3 billion takeover of Crestar Energy. Crestar is also up 1% in heavy trading.

Geac Computer is slumping, down 14.5% in heavy trading on news that its CEO has left the company.

Financials are lightly traded today, although C.I. is bouncing nicely on the heels of recent strong results. It is up $1.85 to $32.45.

In other business news, Hong Kong fast food chain Cafe de Coral Holdings Ltd. is buying the Manchu Wok chain from Laidlaw for $32.5 million.

In New York stocks are bouncing back today, with traders seemingly heedless of the Fed rate announcement due at 14:15 ET today. With the U.S. election in full swing almost no one is contemplating a move. Bullish talk from Goldman Sachs’ superstar Abby Joseph Cohen is helping traders rally, too. The Dow is up 128 points to 10,828. Nasdaq has gained 23 points to 3,592. The S&P has added 13 points to 1,449.

Names such as Hewlett-Packard are bouncing off recent weakness, while the positive chip report is boosting Intel and Advanced Micro Devices. As expected, Xerox is a big loser, down about 18% today.

The CDNX is the lone loser on the day. It is down 27 points to 3,532 on good volume of 20.2 million shares. Mines and techs are both weak, while oils are holding up. Panoramic Mirrors is the top trader, down 18% to 49¢ on 1.9 million shares.