By James Langton

(February 21 – 13:00 ET) – Markets took another punch in the gut at the open today, and have traded near the opening level all morning. At midday, the TSE 300 is down 89 points to 8,148.

Volume is average at 78.7 million shares, about three to two in favour of sellers. Breadth is negative with losers outnumbering winners more than two to one.

Apart from merchandisers, which are flat, every single sub-index is down on the TSE today. Miners and financials are weakest, off more than 2% each.

For a change, Nortel Networks is not captaining the sinking TSE. The beleaguered networking giant is actually up 1% today in heavy trading of 7.9 million shares. The firm has announced a stack of contracts and deals coming out of a prominent wireless convention in Cannes.

But Nortel alone isn’t enough to bail out a glum TSE. Big losers today include techs such as C-MAC, Sierra Wireless, Tundra Semi and Ballard Power. Old economy losers include Uniforet, Potash, Bombardier, Vivendi, and a selection of high flying energy stocks.

Some of the biggest losers today are the banks, which have taken a slugging on the much stronger than expected consumer inflation numbers in the U.S. this morning. The strong January CPI has some traders fearing the U.S. won’t be able to cut rates aggressively in this environment, and some economists are also whispering the s-word, stagflation. As a result, the banks are taking a beating. Royal Bank is off 2.4%, leading the banks lower, and taking all the insurers and fund companies down, too.

Are there any winners out there? Yes, although they are few and far between. Among the techs, Research in Motion is up, as is Pivotal. Other winners include Northstar Energy, DaimlerChrysler, and Weston.

In New York the weak opening has been somewhat erased. At midday the Dow Jones industrial average is down just 20 points to 10,711. The Nasdaq composite index is actually in the black, up 27 points to 2,345. The S&P 500 is up two points to 1,281.

There’s not much direction here though as traders weigh the cloudy economic picture and uncertain profit prospects. The big loser of the day is Sun Micro, off 10%, after it was downgraded by Merrill Lynch.

The CDNX is down a bit today, off 14 points to 3,110. Volume is average at 19.7 million shares. Techs are leading the way down, with oil down too, and mines up. The top trader is newcomer ABI Capital Corp, up 75% to 35¢ on 2.12 million shares.