By Jeff Sanford

(June 16 – 13:00 ET) – Toronto markets are slipping this morning after the TSE 300 composite index closed yesterday at a record high of 10110.56 points. The TSE 300 started the day down almost 8 points at 10,102.68 and has continued to slide. It’s hanging just above 10,000 at 10061.10, down 49 points.

Declining issues lead advancers, 433 to 386 with 246 unchanged. Trading volume at midday is only 67 million shares even though traders were expecting a bit more action today as options come due in Canada. It’s been a quiet week as many traders are cautious, worrying about interest rates and the direction of the American economy.

In the States it’s called triple-witching Friday, a quarterly event in which options and futures on stock indexes and individual stock options come due. That usually produces a volume spike in early and late-day trading as traders try some arbitrage plays on the volatility.

Six of the TSE’s sub-indexes are also down this morning with Communications and Media and Financial Services recovering slightly to 172.67 and 90.27 points respectively after early morning losses.

The CDNX is also down 8.7 points to 3452.87.

As for separate stocks, Seagram’s continues to be active. It’s down $2.50 to $89, on news that its liquor products would be sold to French liquor group Pernod-Ricard if the merger of Seagram and Vivendi SA goes through. Pernod-Ricard was up 7.68% in European trading.

Bank of Montreal was the other big mover as it leads a group of financial stocks lower. It was down $2.00 to $61.50 this morning. The Canadian Imperial Bank of Commerce and Royal Bank are also off slightly.

Earnings warnings are sending stocks lower in the U.S. Concern is mounting over signs that the U.S. economy is finally slowing.

The Dow Jones industrial average is off 120 points, dropping to 10594.18. The NASDAQ composite index is up 18 points to 3863.87.

Richmond Federal Reserve Bank president Alfred Broaddus, a voting member of the Federal Open Market Committee says, “To prevent a re-emergence of inflationary pressures and, in doing so, to sustain the expansion, U.S. monetary policy must allow short-term real interest rates to rise.” Some have taken the comments, made yesterday in Vienna, as proof that the Fed will raise rates at the next meeting of the Open Market Committee, June 27 and 28.