As expected, markets are lower today on war fears that were stoked by the state of the union address given by U.S. President George Bush last night. At midday, the S&P/TSX index is down 49 points to 6,521.

Toronto volume is decent at 120.5 million shares, with sellers outdoing buyers by a seven to four margin. Losers have a better than two to one margin on winners though, highlighting the broad weakness in stocks.

The energy and real estate groups are a little higher at midday, everything else is weaker. Techs are leading the selling, with a 4% drop. Health care, telecoms, industrials, golds and financials are notably weaker, too.

Nortel is not driving the tech trade for a change. It has actually gained 3% on 17.7 million shares traded.

The bigger mover is Celestica. It has taken a huge 21% haircut on strong volume, after announcing disappointing financial results after the close yesterday.

Research in Motion, ATI and Royal Group Tech are also down.

The only stock taking a heavier whack than Celestica is Pangeo Pharma. It is down 50% in heavy trading, after it cut revenue and earnings guidance for the fourth quarter and year. The company is now expecting flat year-over-year revenue and earnings growth for its fourth quarter.

The general selling momentum is spilling into the financials. Scotia is leading the way, down 0.8%. Manulife and Royal Bank are also down. Fairfax is up, however.

There is also selling in names such as Barrick, Norske Skog, Onex, and CHC Helicopter.

Nova Chemicals is down 3% on news that it has recorded a net loss of $48 million for the fourth quarter of 2002. This included an unusual charge of $27 million after tax, which is the company’s share of a Methanex writedown.

There is strength in Molson after it announced earnings for the third quarter of fiscal 2003 increased 49%, from $45 million to $67 million. The brewer cited the contribution from its purchase of Brazil’s Kaiser Brewery 10 months ago.

BCE Inc. earned a net profit of $1.7 billion in the fourth quarter helped in part by a huge one-time gain from the sale if its directories business.

Other gainers include Air Canada, Cambior, Precision Drilling, Minefinders, Vermillion Energy, Dynatec and Bennett Enviro.

The S&P/TSX Venture index is seven points lower at 1,108. Volume is decent at 22.6 million. Kinetic Energy is the day’s top trader, flat at 3¢ on almost 4 million shares traded.

In New York, stocks have also been predictably weak as traders gird for war. At midday, the Dow Jones industrial average is rallying off earlier lows. It now sits down 81 points at 8,007.

The S&P 500 is off six ticks to 853. Nasdaq composite index is 12 points lower at 1,330.

In his toughly worded speech Tuesday night, Bush continued to build his case against Iraq. He said that U.S. Secretary of State Colin Powell will give evidence to the United Nations Feb. 5 of Iraq’s weapons concealment and ties to terrorists.

Bush also promised to revive the sputtering U.S. economy.

Traders are looking ahead to a decision on U.S. interest rates due this afternoon. The Federal Reserve Board is expected to keep rates unchanged.