By James Langton
(June 22 -13:00 ET) – Unfounded rumours that Fed chairman Alan Greenspan was in a car accident slugged markets this morning, sparking an 80 point selloff in the Dow after 11:00 ET, and spilling over into the rest of the markets. That rumour has now been dispelled by the Fed and markets continue to trade lower, led by the techs.
At midday the TSE 300 is off 52 points to 10,145. Volume is average at 84 million shares, about 6:5 in favour of buyers. Decliners though outnumber advancers about 5:4.
Tech stocks are leading the decline with drops in software, hardware and biotechs. Paper stocks, utilities and media plays are all sliding, too. The upside is coming from tobacco, gold, and energy producers. Energy service stocks are sliding, though.
A slide in techs generally and Nortel Networks in particular is weighing on the market. Nortel is down about 2.6% at midday on more than three million shares. Joining the slide are names such as ATI Technology, BCE Emergis and Ballard Power. The biotechs are slumping, too, led by Biovail and QLT.
Software is soft this morning, although short covering and bargain hunting is helping to boost some select names. Research in Motion is clawing its way back up, joined by 724 Solutions, Sierra Wireless and Descartes Systems. Cognos, which was out talking up its fortunes in the U.S. market on CNBC this morning, is also posting some strong gains.
Golds are ticking up today on continued merger chatter, with Placer Dome leading the way.
In M&A news this morning, Plains Energy has accepted a beefed up takeover bid from Precision Drilling. Meanwhile, CIBC exited the P&C insurance business, selling off a couple of subsidiaries this morning.
Kasten Chase has also been a hot stock today, after it was certified by the U.S. National Security Agency to encrypt top secret computers.
In the U.S. markets are bouncing off earlier lows as they try and shake off the Greenspan scare. The Dow Jones industrial averages is currently off about 55 points to 10,442. The NASDAQ composite has slipped a little harder, down 35 points to 4,029. The S&P 500 is off 16 points to 1,463.
Brokerages are taking a hit this morning even after Morgan Stanley Dean Witter & Co. reported a 27% increase in second-quarter net income. Lehman Bros. had strong results too this morning. Cisco Systems Inc. and Oracle Corp. are sliding, and driving the NASDAQ south for a change.
In other news Diageo Plc has announced plans to IPO up to 20% of its Burger King business. The head of the fast-food restaurant division resigned, too.
Over on the CDNX the market picture reflects the situation on the big boards. The CDNX is down 12 points to 3480 on volume of 20.4 million shares. Energy stocks are leading the slide, followed by miners and techs. Sonomax Hearing Healthcare Inc. is the hottest trader, up 240% to 35¢ on volume of 3.2 million shares.