Technology stocks were in the news Thursday morning, helping offset losses on Bay Street, but leading Wall Street lower.

At midday, the S&P/TSX was off 26.13 points or 0.29% to 9094.22, while the TSX Venture dipped five points or 0.28% to 1788.73. In New York, the Dow Jones industrial average was off 22.45 points or 0.21% to 10517.52, while the tech-heavy Nasdaq was down 11.28 points or 0.54% to 2062.31 and the S&P 500 slipped 5.37 points of 0.45% to 1179.26.

The Canadian dollar slid 0.40 of a cent to US81.10¢ as Statistics Canada reported a rise in manufacturing shipments in November.

On the TSX, the slide was led by energy stocks, which were down 0.74%, and by financials stocks, which slipped 0.34%.

Technology shares also were down, 0.33%, as U.S. Internet auctioneer eBay Inc. missed its earnings target for the fourth quarter. Ebay was down nearly 19% to $84.31 on the Nasdaq and pulled other tech issues on both sides of the border down with it.

In Toronto, Nortel Networks Corp. did its best to offset the tech slide. It was up 2.64% to $3.89 in heavy trading (5.6 million shares). Nortel announced it has signed a preliminary joint-venture agreement with China Putian Corp for the development, manufacture and sale of mobile phone equipment China. China Putian and Nortel agreed to negotiate and settle on a definitive agreement by June 30. Financial details were not disclosed, but China Putian will own 51 per cent of the joint venture while Nortel holds 49 per cent.

Elsewhere, shares of Danier Leather Inc. lost 12.5% to $10.50 after the retailer’s second-quarter earnings missed expectations due to warmer winter weather and weak consumer spending.

On Wall Street, disappointing earnings and profit forecasts from the technology sector pushed stocks lower Thursday, overcoming a strong earnings report from Citigroup Inc. and the possibility of a merger in the retail sector.

The pressure from tech shares took momentum from Citigroup’s strong earnings, and investors also looked past reports of a merger between Federated Department Stores Inc. and May Department Stores Co.

Citigroup dropped 0.31% to US$47.89 after reporting record quarterly earnings that were in line with Wall Street expectations. The financial giant and Dow component also announced a 10% increase in its quarterly dividend.

The talks between Federated and May, reported Thursday by The Wall Street Journal, signals another major consolidation in the retail sector, which is struggling to overcome the dominance of Wal-Mart Stores Inc. The proposed merger would combine Federated’s Macy’s and Bloomingdale stores with May’s Lord & Taylor, Filene’s and Marshall Field’s.

Federated slid 85 cents to $56.23 on the news, while May, which recently jettisoned Chief Executive Officer Gene Kahn, gained 8.6% to US$34.07.

Overseas, Japan’s Nikkei stock average fell 1.06%. In afternoon trading, Britain’s FTSE 100 was down 0.39%, Germany’s DAX index dropped 0.51%, and France’s CAC-40 lost 0.51%.