Tech stocks plunging

Today’s huge sell-off exposes the lack of divergence in the Canadian market. It ran up on the back of a few tech stocks and is now plunging on the same stocks. Incredibly only four of the TSE’s 14 groups are down, but three of them, industrials, consumers and utilities are a big part of the TSE. Their losses are huge.

The industrials are down 5.4%, with technology itself off 6.4%, and Nortel Networks notably down 6.4% itself on 2.4 million shares. The consumers are off 4%, led by a 7.5% drop in software stocks. Utilities are down almost 5% too.

Research in Motion has been slammed, down 17%. 724 Solutions has dropped another 10%, despite announcing two acquisitions this morning. MDSI Mobile Data has dropped 17%, Descartes Systems is down 16% and Sierra Wireless is down 8.5%. BCE has dropped 6%, Certicom is down 5%.

In the face of this, financials are strong, up 2%. The insurers and banks are leading the way. TD Bank has added 2% and Sun Life is up 4.4%, powering the rise. Paper stocks, real estate and merchandisers are up too, with tobacco, integrated oils and food stores up. Old news stocks including Bowater, Northstar Energy, Weyerhaueser, Suncor, Weston and Burlington Resources are up strongly.

Small caps have joined the bloodletting, down 2.5% too. The CDNX index has dropped 107 points to 4,201. Volume is light there too at 31 million shares. Technology shares have dropped more than 8%, while the oils and miners are holding up. Nuvo Network Management is the hottest trade, down 9% on 970,000 shares.

Volume is rather light in New York too and the same trends are evident. The tech-heavy Nasdaq is in the dumper, down 104 points to 4,540, with losses deepening at midday after a brief mid-morning bounce. The Dow has added 82 points to 11,100. The S&P is more or less unchanged in the midst of the old economy, new economy gyration.