Canadian markets were up Wednesday morning as energy stocks jumped on an overnight spike in crude oil futures. U.S. markets drifted lower as investors took in the latest remarks from Federal Reserve Chairman Alan Greenspan on the economy and interest rates.

At midday, the S&P/TSX composite was up 40.44 points or 0.42% to at 9610.47 after falling 15 points Tuesday. The TSX Venture Exchange was down 6.88 points or 0.36% at 1886.05. In New York, the Dow Jones industrials average was off 32.66 points or 0.3% at 10804.66 after increasing more than 46 points on Tuesday. The Nasdaq was down 3.12 or 0.15% at 2086.09, while the S&P 500 index had lost 3.08 points or 0.25% at 1207.04.

The Canadian dollar was down 0.79 of a cent at US80.30¢. The loonie lost ground to the U.S. dollar, which advanced on remarks by Greenspan that suggested further increases in interest rates were ahead.

In Toronto, the TSX energy group was ahead 1.42%, even though oil prices, which had spikes early in the day, were falling back. Oil prices had jumped following reports regarding an explosion said to have gone off about 100 kilometres from an Iranian nuclear facility. After early fears the blast may have been caused by a missile, Iranian state television reports it may have actually been the result of a fuel tank falling from a plane.

But crude oil futures dropped sharply from their overnight highs Wednesday, as the U.S. Department of Energy reported a rise in crude inventories.

In morning New York trading, light sweet crude for March delivery on the New York Mercantile Exchange fell a penny to US$47.25 a barrel after trading as high as US$48.30 before the inventory reports.

In New York, U.S. stocks opened lower and stayed that way as some investors interpreted Greenspan’s comments as a sign that more interest-rate hikes may be in the pipeline. Greenspan said in congressional testimony that even after six quarter-percentage point rate hikes since June, the official federal funds rate “remains fairly low.”

That comment was taken by some as a signal that more rate hikes may be on the way.