By Jeff Sanford

(July 24 – 16:30 ET) – Although the TSE started the day off strong, it couldn’t continue that momentum in the face of negative investor sentiment about Nortel’s possible deal with Corning and a tech sell-off in the U.S. The TSE 300 composite finished the day down 58.58 points at 10,783.50.

The decline was led by technology. Among the sub-indices, industrials and oils were the big losers. They registered a 1.15% and a 2.13% decline respectively.

The news of an impending stock swap between Nortel and Corning sent stock in both corporations down. Nortel finished the day off a $1.50.

Joining Nortel on the downside were tech-plays Celestica, off $3.70, Mitel, off a $1 and Research in Motion, down $4.95.

Call-Net bucked the trend and was up 17% on news that it has signed a deal wth NothPoint Communications to offer DSL service to Toronto businesses.

Also on the upside were the major banks. BMO gained a $1, Royal and CIBC $1.05, while Bank of Nova Scotia and TD were up 75¢.

The CDNX finished the day down slightly. It closed at 3,369.65, a loss of 13.55 points.

Even with the one-day loss on the 300, all the good news about the Canadian economy seems to be having an effect on the dollar. Diminished interest rate increases and the ascent of Nortel pushed the loonie through its 200-day moving average. That action caused international traders to take notice and the dollar closed at US68.26¢, up a quarter of a cent.

South of the border, NASDAQ experienced a triple digit loss toady as a sell-off in Internet and computer hardware stocks sent the tech-heavy index plummeting. The NASDAQ composite closed at 3,790.56, a loss of 113.47 points.

Cautious words from analysts about Dell started the sell-off. Shipment growth for Dell slowed from 30.6% to 22.3%, prompting analysts to warn the company could fall short on the revenue side.

Semiconductor stocks, which had been doing well last week, were also big losers.

The Dow wasn’t as badly hit, though it posted a loss for the day. It dropped 48.44 points to finished 10,685.12. Holding up the index was a good earnings report from drug Merck.

The S&P 500 was off 15.90 points to finish the day at 1,464.29.