By James Langton

(September 21 – 13:00 ET) – Toronto stocks are taking a sound thrashing from Nortel Networks, the banks and oil stocks this morning. At midday, the TSE 300 is down 280 points to 10,533, about a 2.6% slide. Market internals are decidedly negative. The light volume, just 70.4 million shares, is 2:1 in favour of sellers, and losers outnumber winners 2:1 too.

Every group is down apart from golds and pipelines. Industrials are leading the way off 4% on a 5% Nortel slide. Financials are down almost 2%, oil and gas are down more than 2%, and most everything else is selling,too, albeit less aggressively.

Nortel has taken a 5% haircut on 5 million shares traded. Profit fears concerning all the big techs and telcos are to blame. The losers include Alcatel, JDS Uniphase, Exfo Electro and Cognos.

eDispatch’s brutalization continues, it shed another 26% today in active trading.

The financials are weak today after the finance minister assured the banks that mergers wouldn’t happen any time soon. The banks had been flying high of late on dreamy merger talk. The big insurers are weak, too, as are the U.S. financials, such as Merrill Lynch.

Franco Nevada is down 2% on news that its proposed merger with Gold Fields is being opposed by South Africa’s finance minister.

On the upside are junk names such as Laidlaw, which is up 23% on 6.5 million shares on news that is has secured bank arrangements to keep it afloat. It sits at 48.5¢.

Not all the techs are dogs either. Research in Motion and Janna Systems are both up nicely today, as is NPS Allelix and Biomira. Potash continues its strength, too.

In New York, the blue chips have battled their way back into positive territory by lunch time, but the techs continue to be sold off. The Dow is up five at 10,692. The Nasdaq composite has dropped 57 points to 3,840. The S&P 500 is soft, too, down 11 points to 1,440.

Morgan Stanley Dean Witter slugged the financials by disappointing the Street with its earnings announcement. Other old economy names such as 3M are leading a recovery though. Goldman Sachs’ chief strategist Abby Joseph Cohen was also out holding hands and speaking sweetly about stocks this morning, calling the euro and energy shock short-term events. Tech stocks remain weak nonetheless.

The CDNX is joining the selloff today, down 20 points at midday to 3,619 on average volume of 18.3 million shares. Techs are leading the sell, down 1%, with mines and oils flat. Zen International Resources Ltd. is the top trader up 5% to 21¢ on 932,000 shares.