Technology stocks dragged the TSX lower Wednesday as investors moved to lock in profits. The S&P/TSX composite index ended the day off 122.58, or 1.42%, at 8,538.12.

The information technology index was the biggest loser, falling 3.2%. Nortel led the IT decline, falling 60¢ to $10 on a volume-leading 58 million shares.

The TSX energy index was down 1.9% as Nexen shares fell $2.26 to $49.35 after it lowered its estimate of total world-wide proved reserves by 8%.

Other big producers also dropped. EnCana fell $1.35 to $52.83; Canadian Natural Resources shed $2.66 to $65.75.

The consumer staples group was the one bright spot, posting a 0.2% gain.

In earnings news BCE, reported better-than-expected earnings from continuing operations leading the telecom index to a 1.8% gain. However, the firm’s net income fell dramatically from last year because last year’s bottom line was inflated by a one-time gain from the sale of BCE’s directories businesses. BCE shares fell 56¢ to close at $29.26.

BMO made its 13th U.S.acquistion with the purchase of Illinois-based New Lenox State Bank for $306 million. BMO shares were down $1.05 to $57.46.

Teck-Cominco shares were up 65¢ to $21 after it reported fourth-quarter earnings that were seven times larger than last year’s, thanks to higher metals prices.

Algoma Steel reported a $10.1 million fourth-quarter profit, helping its shares to a 57-cent rise to $8.69.

The junior S&P/TSX Venture composite index slipped 0.60 to close at 1,787.59.

U.S. blue chips got a bit of a lift from data that showed U.S. factory orders rose 1.1% in December, but they later slipped back.

The Dow Jones industrial average closed down 34.44 points at 10,470.74.

Tech stocks took a pounding after networker Cisco Systems sounded a cautious note about customer spending even as it reported higher than expected quarterly earnings. Cisco shares fell US$2.33 to US$24.08.

The tech-heavy Nasdaq composite index was down 52.07 points, or 2.52%, to 2,014.14. The broader S&P 500 index ended down 9.51 points at 1,126.52.

The Canadian dollar closed up 0.25¢ to US75.02¢.