Strong inflation reports on both sides of the border have traders quivering in fear of looming interest rate hikes today.

At midday, the TSE 300 is down 43 points to 7873.

Volume is strong at 90.9 million shares, with sellers outpacing buyers by a nine to seven margin. Market breadth is bearis, too, with losers outnumbering winners by 27:20.

The selloff is broad-based today, on anticipation of higher interest rates in the near future. Biotechs are down about 2%, paper stocks have dropped 2.5%. And there’s some stock-specific weakness in utilities and media plays. Merchandisers are one of the few winners, after a strong retail sales report.

Techs are swimming against the tide, as traders choose cheap tech stocks over most other sectors. Golds are rebounding a bit, too.

BCE is leading the selloff today, dropping 3.4% on heavy volume of 4.2 million shares, after it lowered its earnings guidance. BCE said that as a result of the shortfall in first quarter one-time or non-recurring revenue announced today by BCE Emergis, the range for first quarter earnings per share for BCE has changed from the previously announced range of 37¢ to 40¢, to 34¢ to 37¢. That shortfall in revenue has BCE Emergis down 30% on 1.4 million shares.

Rio Alto is taking a thumping, too. It is down 17% on heavy volume of 5.2 million shares after it announced a fourth quarter loss of $172 million, taking full year earnings down to just $81 million.

Hemosol is another big loser, down 28%, after it failed to get approval for its Hemolink product in Canada.

There are also slides in a host of names, including Sun Life, Canada Life, Hudson’s Bay, Abitibi, CoolBrands, Peyto Explorations and Canadian Crude Separators.

Nortel Networks continues to enjoy this broad selloff. It is back up another 4% today to $7.50 on strong volume of 7.5 million shares. Celestica is flat today, but ATI Technologies is up nicely.

Certain resource firms are rallying, including Goldcorp, PanCanadian Energy, Meridian Gold, SouthernEra Resources and Co-Steel. There’s also strength in TD Bank, CAE, Canadian Medical Labs and Jean Coutu.

In New York, the spectre of higher interest rates is souring traders on stocks, too. Also worry about corporate debt as traders nervous after bond fund manager Bill Gross expressed concern about GE’s debt load.

The Dow Jones industrial average is down 121 points to 10,381. The Nasdaq composite index has lost five ticks to 1,827. The S&P 500 is down 11 points to 1,141.

The S&P/CDNX composite index is bucking the selloff trend today, gaining one point to 1,154 on light volume of 15.2 million shares. Genoil Inc is the top trader, flat at 20¢ on just 276,133 shares.