By James Langton

(July 24 – 13:00 ET) – The TSE 300 soared to near 11,000 this morning on news that Nortel Networks Ltd. may close a big deal to acquire control of Corning Inc. in exchange for its optical division. BT plc also announced that it will be using Nortel to build an optical network in the UK. The combined news powered the TSE on opening, although the composite index quickly dropped from those highs and is sliding lower at midday.

At noon the TSE 300 is up 63 points to 10,905. Volume is weak at just 49 million shares. While up volume is ahead of the down 7:4, decliners outnumber the advancers 7:6.

Technology is leading the way up of course, although it is joined by strength in the transportation, insurance, brewing and utilities. Gold, oil, mines and paper are all weak today. Software stocks are down, too.

The big mover as usual is Nortel. It is up 1.5% on volume of 3.2 million. Also up strongly are BCE, JDS Uniphase, Alcatel, Exfo Electro and C-MAC. Bombardier has gained 4% on news of increased orders for airplanes this morning.

Methanex, Renaissance, Pacific Northern and Veritas Energy are leading oils down. Some of the high priced techs are weak, too, led by 724 Solutions and Research in Motion. Celestica is down after announcing a new convertible offering that may dilute shareholders equity down the road.

BCE Emergis is sliding after announcing that its loss has widened to 89¢ a share in the second quarter from 23¢ last year, despite a tripling of revenues.

Brookfield Properties Corp. is bidding to takeover Carma Corp. and Gentra Inc. Brookfield will offer Carma shareholders either $5.75 cash or one Brookfield share for each Carma share. It will offer $5.25 per share in cash and one half a Brookfield common share for shares of property manager Gentra. Brookfield already owns sizable chunks of both companies.

CHC Helicopter Corp. is announcing a profit of 13¢ a share for the quarter ended April 20. Moore Corp. has a 16¢ a share loss, down from a 2¢ a share profit last year.

Volume is light in New York this morning and the markets are diverging. The Dow Jones industrial average is up 24 points to 10,757. The NASDAQ composite has dropped 14 points to 4,080. The S&P 500 is splitting the difference, sitting more or less unchanged on 1,480 at midday.

Strong earnings in Merck & Co. is propping up the Dow. JDS and Nortel are boosting the market there, too. Internet stocks are weak though.

The CDNX is down 14 points to 3,369 on average volume of 15.8 million shares. Techs are weak, but oils are weaker. Mines are flat. Norstar Ventures Corp. is the hot trade of the day, up 40% on more than 2 million shares to 28¢.