By James Langton

(October 4 – 13:00 ET) – The TSE 300 is following Nortel’s gyrations like a lost puppy this morning. The tech giant fell sharply on the open, but by midday it has clawed its way back into positive territory and the TSE is not far behind. The TSE 300 is down just three points at midday to 10,453.

Volume remains supermodel-thin at just 61.6 million shares. Sellers hold a slight edge over buyers on the volume chart, but they are beating them handily on the advance-decline line, with winners outpacing losers 10:7.

On a sector basis the markets looks gloomy, only financials and save havens gold and real estate are in the black at midday. Everything else is down with paper stocks leading the way south by 3%, consumer stocks and energy plays are weak, too. Everything else is modestly weak.

After a down open on general tech weakness, Nortel is resurrected at midday, up 60¢ on 2.9 million shares. BCE is up about the same amount. Other techs including JDS Uniphase, C-MAC, MDC and Centricity are also up. Com Dev is up 4.5% in heavy trading on its addition to the TSE 300.

But the direction is mostly down for software and biotech stocks. Names such as QLT, NPS Allelix, Celestica, Alcatel and Janna Systems are all down.

A couple of issues are swimming against that tide on individual news. Corel traders are finding even more upside in that beaten down stock, adding another 4.5% in heavy trading. Biovail is bouncing back strongly today after the stock was nailed with an analyst downgrade yesterday. It is up 10% on news of a small acquisition to boost its U.S. distribution capability.

Abitibi is dragging the paper group down, off almost 7% on 4.9 million shares. No news from the firm.

Energy shares are sliding, led by Gulf Canada down 2% in active trading. That said, Barrington Petroleum and Ensign Resource Services are both strong.

The apparent resolution of the Rio Algom takeover battle, with Noranda surrendering to Billiton plc, has that stocks sliding a little in active trading, down a nickel to $26.90, just below its proposed takeover price of $27.

In New York stocks are decidedly mixed. The old school Dow is up 72 points to 107,91. Nasdaq is down 23 ticks to 3,433, although it has been down more severely and is clawing its way up at midday. The S&P 500 has dropped a couple of points to 1, 425.

Software stocks are down led by weakness in Oracle and Computer Associates. Semiconductors are up strongly. Market maker Knight Trimark is hitting the brokerage group a little on an earnings warning from that firm. Dow strength is coming mostly from bounces in beaten down issue. Names such as Intel, Boeing and Merck are bounding back.

The CDNX is down on weakness in its tech stocks today. At midday the index has surrendered 23 points to sit at 3,482 on decent volume of 17.9 million shares. Mines are also down, while oils are flat. Kirkless Capital Inc. is the top trader, up 70% to 51¢ on 1.7 million shares.