A big earnings warning from Big Blue and oil-rationing by Iraq have combined to hammer the market, this morning. At midday, the TSE 300 is down 63 points to 7719. Volume is moderate at 78.6 million shares, with selling outweighing buying by a margin of 11:4. Market breadth is negative but much more even at 11:8 in favour of losers over winners.

Tech stocks are leading the drop, following IBM’s warning. The group is down about 5%. Telecoms aren’t close behind — down 4%. The Iraqi news is having a bipolar effect. Energy stocks are up on the strength of higher oil prices, but everything else is down on the fear that higher pries could hinder economic recovery.

Celestica is taking the IBM hit hardest. It’s stock is down 9.4% in heavy trading. Nortel
Networks is taking a thumping again today, down 5.5% on 9.6 million shares. There’s also major selling in JDS Uniphase, CGI Group, Research in Motion, Telus, and QLT. BCE is getting walloped again today too, it is down 7.5% in heavy trading.

Other losers today include Barrick Gold and Alcan. Merger partners Trilon Financial and Brascan are both down in active trading. Royal Bank is leading the banks down. Onex has dropped 4.4%, despite news that it plans to buyback as much as 10% of its own stock.

The winners include energy plays such as Precision Drilling, Canadian Superior Energy, Hurricane Hydrocarbons, Bonavista Petroleum and some of the energy income trusts. There are also gains in ProMetic LifeSci and Microcell.

In earnings news apart from IBM, Cogeco reported that its second quarter income increased to $36.5 million. Cogeco Cable earned $982,000 in the quarter.

Small cap stocks aren’t fairing much better than their big market colleagues. The S&P/CDNX index is down six points to 1170. Volume is average at 15 million
shares. New Blue Ribbon Resources is the top trader, up 12.5% to 9¢ on 608,000 shares.

In New York, markets are down, though they’ve bounced up from intra-day lows. The Dow Jones industrial index is down 90 points to 10182. The NASDAQ composite index has dropped 25 points to 1745. The S&P is off by seven points to 1115.