By Jeff Sanford

(June 22 – 16:30 ET) – Even though the rumour about Fed Chairman Alan Greenspan being in a car accident — which sent markets down this morning — turned to be false, markets were unable to recover from the early losses.

In Canada, the TSE 300 finished down 132.77 points to end the day at 10,064.50.

Some of that decline was due to continued profit taking on the two heavyweights, Nortel and BCE. Ten sub-indices were also down on the day, with industrial products and consumer products indexes leading the way down. Biotech plays QLT PhotoTherapeutics Inc. and Biovail were responsible for taking the consumer products index lower

Kasten Chase, the Toronto based software maker, which ran up yesterday on news that its encryption software was the first to be certified to send top secret U.S. government documents, pulled back today, falling 11.8% to $6.70.

Research in Motion was also making waves today. It was up $7 after having its rating upped by a U.S. brokerage.

Canadian driller, PlainsEnergy Services, was up 15.61%, to bring it to $11.85, on news that a second takeover bid by Precision Drilling Corp. came in 30% higher than the last one.

The most active stock again was William Resources, the former mining play turned tech-stock. It was down 2.6% after a run up yesterday on news that it has partnered with a privately held biotech firm. Over eight million shares of the penny stock changed hands.

The CDNX stayed close to home, finishing down 0.87 points.

A bright spot on the day was gold up 1.55%

The Canadian dollar ended the day at US67.69¢.

The reaction to the Greenspan rumour this morning, as well as confirming that markets are fundamentally irrational, served to demonstrate the nervousness investor’s harbour in the week before the next Fed meeting.

The Bond Market Association is predicting an interest rate of 7% by the end of the year, though, no increase in June. Inflation is still the biggest risk to the economy they say.

Nevertheless, the nervousness led to a sell off in the U.S. markets, wiping out the gains of the last week. The Dow tumbled 121.62 points to end at 10,376.12, while the NASDAQ dropped 127.14 points to finish the day at 3,936.87.

The S&P 500 finished the day off 26.95 points to end at 1,452.18.