By James Langton

(May 18 – 13:00 ET) – At midday, the TSE 300 is up an earth-shattering two points, to 8231. Volume is average at about 68.5 million shares. Advancing issues hold a seven to six edge over declining issues.

Despite the incline, just four sectors are actually up. Energy is the only group up with any conviction. There seems to be some hope that the new U.S. energy plan is going to make energy plays rich worldwide. Gold, utilities and consumer stocks are making minor gains. Everything else is flat or down, including conglomerates, paper stocks and miners.

Market bellwether Nortel Networks is indicative of the sleepy trade. It is up just 4¢ on 2.5 million shares. Rampant talk of a possible merger between two of its principal rivals, Alcatel and Lucent, isn’t doing much to move the stock. Alcatel is down about 7% on the news.

Stocks joining Nortel on the upside are a mixed bag. Sherritt is up notably, as is Research in Motion, Gulf Canada, and golds such as Kinross and Barrick. The volume is not as strong, but other winners include Hydrogenics Corp., Richelieu Hardware, Cryptologic, Intertape Polymer, GSI Lumonics and
Westport Innovations.

The downside is represented by a similarly mixed group. 360networks is sliding today. It’s off 9% in active trading. Alcatel is down, as noted, as is Exfo Electro, Cognos, Cognicase, Turbo Genset, Guardian Capital and Royal Bank. Indeed, almost all the financials are down after a weak earnings report from TD Bank yesterday.

In M&A news, media giant America Online Inc. is trekking north to take over InfoInteractive for US$28.2 million in cash. The transaction has been unanimously approved by the board of directors of
InfoInteractive.

In earnings news, Future Shop has reported net earnings for the fourth quarter were $6.5 million, or 20¢ per share, compared with 14¢ for the same quarter last year. Baytex Energy Ltd. said its first-quarter profit fell 45% to $5.5 million, or 12¢ per share, from 27¢ last year. Finally, Axcan Pharma has filed a preliminary prospectus to issue 3 million common shares at a price of $17 per share, for gross proceeds of $51.0 million, to a syndicate of underwriters led by National Bank Financial Inc.
The closing of the offering is scheduled for May 31.

The CDNX is up 12 points to 3244. Volume is strong at 20.9 million shares. Techs and miners are leading the way, oils are flat. Marquette Capital Corp is the top trader, up 235% to 67¢ on 2.1 million shares.

In New York, the action has been similarly weak. The Dow Jones industrials index is down 26 points
to 11222. The NASDAQ composite index has dropped three ticks to 2190. The S&P is down two
points to 1286. Weak earnings reports are about the only news.