TSE and CDNX up at midday

Volume is strong again at 87.9 million shares, although the price moves are mostly modest. Trading is 2:1 in favour of buyers. Advancing issues are outpacing decliners by a slight edge, though it’s really still the penny stocks that are providing much of the action.

On a sector basis, eight of the TSE’s 14 groups are up. Insurers and cable stocks the only convincing movers. Miners and techs are up a bit, too. The downside is pretty weak with tobacco, transports and gas utilities sliding.

Repap is the top trader again today, moving 15 million shares up half a cent to 19.5¢, just short of its 20¢ takeout price. Penny plays, William Multi-tech and Heritage Systems continue to trade actively, too, as are Plaintree Systems and Concord Pacific.

The biggest contender is Nortel Networks, up 1.4% on 2.3 million shares as it debuts some new products at a trade show in Denver, along with rivals Cisco and Lucent. It is joined by tech luminaries such as 724 Solutions, up another 8%, Sierra Wireless and Certicom. As the profit-taking resumes other techs are doing well, including JDS Uniphase, BCE Emergis, Ballard Power, Delrina and Hummingbird.

The media space is active today on news that Corus Entertainment Inc. is buying Metromedia radio stations for $165 million in cash.It will also assume $20 million in debt. Both Nelvana and Seagram are up sharply in the media space.

Sun Life Financial is leading the insurers higher, up 1.5% in active trading. It is joined by big moves from other Financials, albeit on lesser volume. Manulife is almost 4%. Canada Life and Clarica are also doing well. Insurers are subject to merger speculation worldwide on the news that French insurer Axa Financial is selling its 70% stake in Wall Street broker DLJ for about US$12 billion in cash. It’s expected to spend some of that money on an acquisition of its own.

The fund companies are bouncing on news of AGF’s $438 million buyout of rival Global Strategy. AGF is down slightly on the news, but C.I., Dundee, Guardian and Mackenzie are all up on speculation about who will be next.

The small caps are strong for a change today. The CDNX is up 10 points at midday to 3431. Volume is decent at 16.7 million shares. Techs are providing all the strength, with miners and oils sliding. Savanna Resources Ltd is the top trader, up 25% to a mere 5¢ on 575,500 shares traded.

In business news, Magna Entertainment Corp., one of the largest operators of horse racetracks in the United States, said on Wednesday it will acquire Bay Meadows Operating Company in San Mateo, California for $24.1 million cash. Magna Entertainment, a spin-off of auto parts maker Magna International, expects the deal will add to its earnings next year since the company will expand its year-round horse racing schedule.

In New York the trading has been sleepy, with the CSFB-DLJ deal the only topic on traders’ lips. At midday, the Dow is off 76 points to 11138. The NASDAQ composite index is down three points to 4,079. The S&P has dropped six points to 1503. Brokers remain strong today and semiconductors are weak.