The Bank of Canada finally caved today, cutting rates by 25 basis points as expected, but admitted that recovery is not imminent. Stocks are tanking partly in response to that, but also on the heels of further weakness in the U.S. The TSE 300 is down 95 points at midday to 7567. Volume is improved over yesterday at 59.7 million shares, overwhelmingly in favour of sellers at 5:1. Market breadth is better, but still deeply negative, at 5:3 in favour of losers.

Every single sector is down today, and even worse than that, ever single sub-sector apart from building materials and wholesalers is down. Traders seem to be capitulating to the Bank’s newfound negativity this morning. Techs are leading the way down, pushing industrials down 2%. Miners, golds, energy, consumer stocks, utilities, conglomerates and financials are all down at least 1% as well.

Today’s rate cut didn’t do much to help financials, which ran up in anticipation, only to be smacked down by the Bank’s policy statement. Only Bank of Montreal is holding a slight gain after announcing that it had net income of $444 million for its third quarter ended July 31.

The other banks are leading the way down, with TD off 1%, Bank of Nova Scotia down 3.3%, Royal Bank off 2.4%, and CIBC down just a little. They are delivering lots of selling volume, joined by big sellers such as CP, Manulife, Future Shop and Nortel Networks.

Techs are generally weak in the wake of Goldman Sachs lowering estimates for Sun Micro. Along with Nortel, JDS Uniphase, Research in Motion, Descartes Systems and Celestica are all down notably. Other losers include Cott, GTR, Ballard Power, Anderson Exploration, Fording and poor old Transat AT.

There is some strength today, or at least there are a few stocks going up, but they are hardly compelling. Telesystem International is up, along with Bell Canada International, Centrefund, Emco, Alliance Forest Products, Ensign Resource Services, Petrobank and Clarica.

In business news, Molson shareholders approved a split of the company’s class-A non-voting shares and class-B common shares on a 2-for-1 basis.

In New York, markets are breaking down too, as last Friday’s rally is quickly given back in the face of gloomy economic sentiment. August Consumer Confidence came in weaker than expected, and with the consumer the last remaining economic support, traders are really worried now. The Dow is down 129 points to 10253. Nasdaq is off 31 ticks to 1881. The S&P has dropped 13 points to 1166.

The CDNX can’t avoid the landslide selling either; it is down 27 points at midday to 3044. Volume is soft there at 13.4 million shares. Energy is the weakest group, down 2.5%, followed by slides in miners and techs. Tml Foods Inc is the top trader, flat at 5¢ in its debut, moving more than 2 million shares.