By James Langton

(September 15 – 13:00 ET) – BCE and Thomson made a formal merger announcement this morning. But, the new $4 billion company failed to get a rise out of the market. Instead, Nortel Networks continues to dictate the action.

Unfortunately, that action is downward. Nortel is off 1.3% on 4.6 million shares. Profit-taking after yesterday’s gain seems to be the reason. Many of the big name techs are taking a cue from Nortel. JDS Uniphase, Wi-Lan, Sierra Wireless, Certicom, Creo and BCE Emergis are all down.

By midday, the Toronto Stock Exchange 300 composite index dropped 49 points to 11029. Volume was moderate this morning — 77 million shares. Sellers had the edge.

The industrials sector is leading the TSE down, joined by the golds, and financials. There has been some weakness in media stocks, miners, paper and pipelines. Only utilities, boosted by the BCE-Thompson merger, and energy stocks, riding on rising oil prices, are gaining much.

BCE is up 2.7% on news of its deal Thomson. Under the deal, BCE will own 70.1% of the new unnamed firm, Thomson gets 20% and Thomson’s Woodbridge company will hold the remaining 9.9%. The new company will bring together BCE’s CTV network, its sports networks and its Internet portal Sympatico, along with Thomson’s Globe and Mail newspaper, its Globe Web sites and 50% of ROBTV. Plans to acquire the Toronto Maple Leafs and Toronto Raptors have not come to fruition.

Videotron that other media merger story is still the top trader of the day, off slightly on almost 6 million shares.

Banks are leading the financials lower, with TD Bank down 1.2% on 1.1 4 million shares, but all the banks are soft after recent gains. Amvescap is unusually active today, up almost 1% on 1.3 million shares. Bunting Warburg crossed more than 1 million shares, today, and CIBC has followed with a couple of big blocks too, making up most of that volume.

In New York stocks are mostly down, today. The Dow Jones indusrials composite index is down 23 points to 11064. The NASDAQ is off 52 ticks to 3861. The S&P is off six to 1474. Techs, such as Intel, Microsoft and IBM, are weighing on the Dow. Oracle is also down after beating the Street with earnings results yesterday. Most stocks seem to be shaking off any good news, and giving in to September blues. ExxonMobil is up sharply though, providing some downside resistance.

The CDNX is the only market up today, it has gained 19 points to 3671 on very strong volume of 28.5 million shares. Miners are leading the way higher, with some help from oils and minimal resistance from techs.