As expected, markets plunged this morning on news of an apparently massive US$3.9 billion accounting fraud at WorldCom Inc. Still, markets have bounced off their early lows, and at midday the S&P/TSX composite index is down 64 points to 7,057.

Volume is strong at 120 million shares, with the selling volume almost doubling the buying. Market breadth is very weak with losers outnumbering winners by 14:5.

The selloff is broad-based today, as the WorldCom news fundamentally undermines investor confidence in corporations. Techs and telecoms are taking the hardest hits today, but there is also notable weakness in everything from financials and real estate to health and consumer stocks. Even the golds are weaker as a sector, despite a basic flight to quality move in the market.

On the heels of the WorldCom news, Nortel Networks is down another 13% to just $2.18 per share on massive volume of 32.5 million shares. BCE is down 2.5% in heavy trading, and there’s also weakness in Telus, ATI, Zarlink, Shaw and Rogers.

At&T Canada is bucking the trend, up 3.4%, thanks to its impending takeover. But there’s also weakness in other tech-type names such as Angiotech, Ballard Power and Bennett Enviro.

The weakness in techs and telecoms is spilling over into the financials on fears over how much they may be on the hook for these losses. CIBC is weakest, down 1.6%, followed by Bank of Montreal, Royal Bank and Scotia. TD Bank is actually up 1.5% on the day, and National Bank is gaining, too. Fund companies AGF and Investors Group are both notably lower. Sun Life is down 1.8%, leading the insurers lower.

The big name stocks are generally weaker , with Alcan down, along with EnCana, Bombardier, Inco, Hurricane Hydrocarbons, Power and SNC Lavalin.

On the upside, the golds are acting as a safe haven once again, with gains in Barrick, Kinross, TVX Gold, Newmont Mining and Echo Bay Mines. But the sector is being dragged down by weakness in Placer Dome, which is down 1.8% on a negative response to its takeover offer to AurionGold. AurionGold’s board has recommended that shareholders defer acceptance of Placer Dome’s offer rather than reject it. Meridian Gold is down too.

There are also gains in a handful of names including CN Rail, Teck, Cameco, QLT, Loblaws, Fairmont, Weston, Enbridge and Canadian Tire. There’s a bit of strength in consumer stocks on strong durable goods orders data in the U.S.

In earnings news, for the year ended May 4, Sobeys has reported record operating earnings of $141.7 million, a 55% increase.

On the financing front, Power Financial has entered into an agreement with a syndicate of underwriters led by BMO Nesbitt Burns Inc. under which it has agreed to buy 6 million preferred shares, representing a total amount of issue of $150 million. Closing is expected on July 16.

In New York, stocks are well off their opening lows at midday, although the Dow Jones industrial average is still trading down 90 points to 9,036. The S&P 500 has dropped nine ticks to 967. Nasdaq is down 10 points to 1,414.

The small caps are not offering any refuge from the heavy selling today, with the S&P/TSX Venture index down 19 points to 1167. Volume is average at 15.5 million shares. American Bonanza Gold is the top trader, flat at 20¢ on 1 million shares traded.