Markets all end week lower

After plummeting soon after the opening bell, the TSE 300 composite sank steadily over the session to finish off a heavy 353.23 points, a drop of 3.3 %. Nortel, which accounts for more than 30% of the index, takes much of the blame.

Nortel’s lightning-fast move today to acquire web-switch developer Alteon WebSystems Inc. for US$7.8 billion in new shares, along with a cancelled deal with Corning a day earlier, was too much for traders. Nortel stock slid right after a morning trading halt ended, as volume surged to more than 9 million shares in Toronto and 17 million on Wall Street, where it was the second most active stock after Nokia.

In the end the mighty Nortel was off $8.30, a drop of 7.17%, to finish the day at $107.45. That’s well below its 52-week high of $124.50 and takes Nortel back to the range it held in June and early July.

Overall on the TSE, 639 issues advanced while 430 declined on relatively light volume of 105 million shares. Among the sub-groups, only oil and pipelines were up. Industrials slid over 5%, a loss of 832.29 points. Communication stocks, conglomerates and financial stocks were other big losers.

In individual stocks, JDS Uniphase lost 17% to close at $172 while RIM lost 8% to $74.50. Heavily traded Bombardier went against the grain and advanced 20¢ to close at $22.65. BCE was down 40¢ at $34.60, while TD was down $1.05 to an even $35. Both stocks saw heavy trading.

The CDNX finished the day down 15.85 points at 3303.35 leaving it below Monday’s 3380 points.

The strong U.S. data out this week had an effect on the C$, which hit a one-week low overnight Thursday as the US$ hit C$1.4742. The slide began with the release of the durable goods numbers yesterday and continued with today’s report showing U.S. GDP growing at 5.2% in the second quarter.

The ‘good’ economic news also contributed to the sell-off in the U.S., as traders rethink their assumption that the Fed would not raise rates at the next Open Market Committee meeting. The better than expected GDP numbers, durable goods orders and some minor employment numbers over the course of the week suggest the economy isn’t as cool as Fed chairman Alan Greenspan would like.

A 179.11 point decline on the NASDAQ today takes it back to where it was eight weeks ago. NASDAQ began the week around 4100, and closed today at 3663.00.

No place was safe. In New York, the Dow Jones average closed down 74.94 points at 10511.17. It began the week at almost 10700. The S&P 500 was also down, closing 1419.91, a loss of 29.71 points. That’s off from Monday’s 1480 points.