By James Langton

(February 17 – 13:00 ET) – U.S. Federal Reserve Board chairman Alan Greenspan continues to talk tough on inflation, under questioning by the U.S. Senate Banking Committee. Nevertheless, the friendly inflation data released prior to Greenspan’s testimony seems to be winning over the tech sector, and driving the markets. The TSE 300 is up 83 points to 9,511 so far today.

Volume is heavy again at 160 million shares, 3:2 in favour of buyers. Advancers are trumping decliners about 11:9 too.

The consumer sector is up more than 4%, joined by strong gains in theindustrials, paper stocks and metals. Only oil and gas is down this morning, and its decline is moderate.

Vengold is leading the trading again today after unveiling its proposed shift from th egold business to the online business. The firm is up 71% to $1.91 on volume of 17.5 million shares. Several other penny stocks are also trading huge volumes on similar speculation.

News of a big deal in the global paper sector has that group up. Abitibi is leading the way up 1.5% on almost 4 million shares. Yesterday’s takeover targets, AGRA and Teleglobe are also trading aggressively, yet they are up moderately at midday.

The benign inflation data in the U.S. this morning has encouraged tech stocks. 724 Solutions is up almost 11%. Research in Motion, Sierra Wireless, JDS Uniphase and Certicom are up strongly too. The biotechs and Ballard Power are up again as well. There’s really not much convincing downside in evidence so far. Although BCE Emergis, Informission and Angiotech are sliding slightly. Boliden however is taking a beating. It has dropped about 23% so far.

Manulife Financial reported earnings of 50¢ per share in its latest quarter, up from 40¢ in the period last year. Cott Corp. has earned 6¢ per share for its fourth quarter, compared with an 85¢ loss last year. Cambridge Shopping is posting a loss of $1.85 per share after taking an after-tax $175 million asset writedown. Dorel Industries is reporting earnings of 58¢ per share in its recent quarter, up from 42¢ in the period a year ago.

Newbridge is said to be in talks with Alcatel about a possible buyout. CFM Majestic is in sale talks too.

The small caps are moderately higher today. The CDNX index has added nine points to 3,415 on strong volume of 57.7 million shares. Miners are leading the way up, oil and gas stocks are down, and technology is flat. Future Mineral Corp is the strongest trader, up 135% to 42¢ on volume of 2.6 million shares.

In New York stocks are mixed, with the Big Board seeming to listen closely to Greenspan’s hawkish flappings, while tech traders are following the positive PPI report. The Dow is down 59 points at midday to 10,501. Nasdaq is up 68 points to 4,496. The S&P is down eight points to 1,384.