By James Langton

(March 20 – 13:00 ET) – Markets are grinding lower as traders wait for news from the U.S. Federal Reserve Board. Economists remain divided on whether the Fed will cut interest rates 50 or 75 basis points.

Some traders feel that there’s been enough hype about a possible 75 bps move that 50 would be seen as disappointing, although it is still considered the most likely outcome.

In the meantime, the TSE 300 opened down, struggled up, but is sliding again, now down about 46 points to 7,865. Volume remains on the light side at 61.4 million shares, about four to three in favour of sellers. Decliners are outpacing advancers more than nine to eight.

The TSE sectors show a slight negative bias too. Ten of the TSE’s 14 sub-indices are flat or down at midday. Industrials are weak, down about 2.4%. Utilities, media stocks and consumer stocks are down, too. Mines are up strongly, as are energy stocks, but otherwise the buying is thin.

Nortel Networks continues to grind lower, down another 3% today to $27 on 4.7 million shares, giving up yesterday’s late gains. Joining Nortel on the downside is Celestica, off almost 16%. This has Onex down about 8%. There’s no news from the company to explain the slide.

Health stocks are generally weak today, with Axcan Pharma and MDC Corp. down. Telesystem International Wireless is weak, as are Wescast, Aastra, Tesma and Empire.

Among the financials, the banks are all down apart from TD, which is modestly higher. The insurers are generally holding up. Yesterday Guardian Capital was slugged around, today it’s Sceptre’s turn. The fund company is down more than 5%.

Standing resolutely strong and strangely alone in the optical space is Canada’s own Exfo Electro. The firm raised its guidance today, and its shares are up 11% in active trading.

Other winners today include Dreco Energy Services, Gulf Canada, Barrick Gold, Bombardier, Decoma, TLC Laser Eye Centers, Enghouse Systems and Rogers Wireless. Ballard Power is up, too, as Californian power troubles resurface.

In business news, Bitech Petroleum Corp. is buying Vanguard Oil Corp. for $6.9 million in cash and stock, with the cash component limited to about $2 million. Bitech will also provide Vanguard with an immediate short-term loan of US$1.2 million, secured against certain Vanguard assets, to meet its current working capital needs.

In New York, markets are up lightly up, but trading is light ahead of the Fed announcement. The Dow Jones industrial average has gained 47 points to 10,006. The Nasdaq composite is up 15 points to 1,967. The S&P 500 has gained eight points to 1,179. Retail stocks, basic materials, and financials are powering the Dow higher.

The CDNX is sticking with the TSE today, down three ticks to 3,018. Volume is weak again at 13.7 million shares. Techs and mines are up, but oils are weak. Genoil Inc is the top trader, flat at 8¢ on almost 1 million shares.