Markets rally across North America

The news spurred traders to buy. The TSE 300 finished the day up 300 points to 9552 on volume of 138.8 million shares. Volume came in more than 2:1 in favour of buyers, and advancers outstripped decliners 4:3.

The market was hot today, but it could have been hotter if it hadn’t been for the latest glitch in TSE trading. Trading in Nortel Networks Corp., the TSE’s biggest issue, was laid low for more than four hours in the middle of the day today by a computer problem that only hit Nortel.

The problem was apparently an isolated one with the TSE’s creaking CATS trading engine. After Nortel re-opened at 14:12 ET the TSE issued a statement saying, “The TSE has identified today’s problem, tested a solution and will implement changes to the application tonight.”

Nortel finished the day up 6.5% to $85 on an unusually light 3.8 million shares traded. The importance of Nortel to the TSE was highlighted today, as the TSE rallied hard on the open, stalled while Nortel was halted, and took off again toward the close after Nortel rejoined the trading.

Thanks to Nortel industrials led the TSE up, followed by consumer stocks, financials, utilities, media stocks, and energy and paper. The only weak sectors were miner and real estate.

Nortel was joined by numerous big tech gainers, including JDS Uniphase, Sierra Wireless, Certicom, 724 Solutions and Research in Motion. All moved with general tech enthusiasm.

With Nortel halted Beau Canada Exploration Ltd. is the hottest trade on the TSE, up 5¢ in heavy trading after it announced that it is shelving its plans to sell the company while it deals with the resignation of long-time CEO Tom Bugg.

Naturally the financials perked up at the prospect of the end of rate hikes. Both Scotia and CIBC have joined the parade of record bank earnings. Scotia reported Q2 earnings per share of 88¢, up from 73¢ last year. CIBC booked an EPS of $1.64, up from 66¢ in the period last year.

These results, combined with the new sanguine view on interest rates, pushed those stocks up. Also hot among the financials was Legg Mason Canada, which closed up 10% as the U.S. financials rallied too. Trimark Financial was another strong trader, up 20¢ to $25.45 on 1.4 million shares.

@page_break@In other business news, the Alcan-Algroup deal looks set to go through thanks to an increased bid by Alcan that has pulled big shareholder Martin Ebner onside. Alcan upped its offer by 3% to make the deal happen. To celebrate Alcan executives dropped the closing hammer on trading at the NYSE this afternoon. Alcan though closed down about 4.5%.

Other losers included old economy plays such as General Motors, Burlington Resources, Harris Steel, Mullen Transportation and DaimlerChrysler.

In other news, traders were awaiting a decision on the Microsoft anti-trust case that never came. Instead, the judge delayed his decision after government lawyers asked for more time to file additional briefs in response to Microsoft’s proposals.

Stocks rallied in the U.S. on the heels of the NAPM report which led to strong gains in firms such as Cisco Systems Inc. and Oracle Corp. NASDAQ led the way in the U.S. , closing up 5.3%, a 181 point move to 3582.

Evidence of the tech rebound was clear in the IPO business where shares in ONI Systems Corp. more than doubled, this after the fibre-optic equipment maker boosted the IPO by 56% in response to investor demand.

The Dow also had a strong day, although not as dramatic as the NASDAQ. It closed up 130 points to 10652. The S&P 500 added 28 points to 1448.

A strong finish by the small caps made the victory unanimous today. The CDNX added 61 points to 3325 on volume of 41.8 million shares. Techs led the way, up 4.4%. Mines and energy stocks were up too. Masuparia Gold Corp. was a strong trader, finishing down 45% to 26¢ on 2.6 million shares.