The Toronto Stock Exchange 300 composite index is down 120 points to 7578. Volume is strong at 80.5 million shares, with a very negative bias. Volume is favouring sellers by about 4:1. The losers outnumber winners by about 2:1.

On a sector-by-sector basis, everything on the TSE is down this morning. Only the brewery sub-index is up, suggesting that traders may be anticipating some after-the-close drinking today. But everything else is weak led by techs, which are down almost 4%. Financials are very weak, down more than 2%. Miners and others are down too. A slew of earnings warnings seems to bringing out the bears.

Nortel Networks is leading the way down, dropping 6% on 6.5 million shares. ItÕs followed down by Pivotal, Hummingbird and JDS Uniphase. Tech earnings warnings in the U.S., Europe and even here at home seem to be the culprit.

An earnings warning from brokerage giant Merrill Lynch is weighing on the financials. Merrill is down 7.5% as a result. ItÕs dragging taking down all the banks. TD Waterhouse and 724 Solutions are being hit from both sides, as they both straddle the tech and financial sectors, both are suffering today.

There is a mixed bag of names making some slight gains. Takeover target Barrington Petroleum is up, as is NQL Drilling, Andres Wines, Sloan Forest, Exfo Electro, Cryptologic and Tesma.

On the news front, Alliance Atlantis said it experienced record revenue, gross profit and EBITDA for the year ended March 31. But it still reported earnings per share for the period were $1.09 compared with $1.25 per share recorded last year.

In M&A news, Cognicase says it will be acquiring privately-owned web firm Personus Inc., of Toronto, formerly Caught in the Web. It boasts clients such as Merrill Lynch, HSBC, Groome Capital, Empori, TD MarketSite, Onex Corp., Barrick, Kellogg and Microsoft. No price was disclosed.

The CDNX is feeling the heat too. ItÕs off 11 points to 3245. Volume is strong at 20.4 million shares, and all sectors are weak, led by the oils.Genoil Inc is the top trader, down 6.5% to 43¢ on 5.5 million shares.

In New York, the scene is much the same. Merrill is crushing a market that had been expected to simply float along, ahead of tomorrow’s rate decision by the U.S. Federal Reserve. But alas, it was not to be. At midday, the Dow Jones industrial average is down 93 points to 10410. The Nasdaq composite index is off 27 ticks to 2023. The S&P has dropped 13 points to 1206.