By James Langton

(March 2 – 13:00 ET) – After a drop at the open that saw the TSE sink below the 8,000 mark for the first time since December 1999, stocks are clawing their way back at midday. The TSE 300 is currently down about 44 points to 8,060.

Volume is strong at almost 94 million shares, with sellers outnumbering buyers by a margin of about 11 to six. Market breadth is split almost down the middle between winners and losers.

On a sector basis the market is demonstrating its resistance. Only five groups are down, but they are down heavily. After last night’s warning from Oracle, software stocks are down another 4% today, and hardware is off about 3%.

Not surprisingly, industrials, consumer stocks and utilities are down notably. Gold and media stocks are weak, too. The upside is getting support primarily from energy plays.

Nortel Networks continues to suffer, down 3% on heavy volume of 9.1 million shares. Nortel’s woes aren’t specifically related to Oracle except that analysts continue to lower their spending estimates for the entire tech sector.

Joining Nortel among the losers are JDS Uniphase, 360networks, Siebel, C-MAC, Cognos and Hummingbird. There’s also weakness in Potash Corp., Biovail, Bombardier and Ballard Power.

The financials are generally higher today, with all the banks bouncing back on bargain hunting. BMO and Scotia are leading the way. Clarica and Canada Life are bouncing back, too, but Sun Life is down sharply in active trading.

While there is some buying on the TSE, there’s not much volume in it. The big moves are on the energy side, where names such as Veritas, Dreco, Talisman and Northstar Energy are all enjoying some strength.

In New York, stocks opened sharply lower as the dogs all chased Oracle down. After freezing up a little while U.S. Federal Reserve Board Chairman Alan Greenspan spoke to the House Budget Committee, stocks are heading higher.

Greenspan insisted that the Fed didn’t keep rates too high too long, and also reiterated his preference for tax cuts over spending increases with the U.S. surplus.

Also this morning, the Michigan Sentiment index came in stronger than expected, indicating some positive feelings about the U.S. economy.

At midday, the Dow Jones industrial avearage is up 56 points to 10,506. The Nasdaq composite index is down 33 to 2,150, but it is up off its intra-day lows. The S&P 500 is down just one point to 1,240.

In the U.S., Oracle is leading today’s slide, joined by Cisco, JDS, Sun, Microsoft and i2 Technologies. Intel and Qualcomm are bouncing back, as are Nokia and Motorola. Nortel, EMC, Corning and GE continue to weigh down the NYSE.

The CDNX continues to hold up well. At midday it is up five ticks to 3,069. Volume is soft at 16 million shares. Mines and oils are overwhelming a slide in techs. Genoil Inc. continues as the top trader, down 8% to 11¢ on 1.2 million shares.