Traders are fleeing for higher ground today as the talk of war escalates.

Stocks opened higher this morning, but as reports of the Taliban calling for a Holy War against the United States. filtered in, stocks began selling off aggressively.

At midday, the TSE 300 is down 157 points to 6,687. Volume is stronger today at 105 million shares, with sellers outnumbering buyers three to two. Losers hold a 13 to five edge on winners.

On a sector basis, the market is easy to read. Golds and pipelines are up, everything else is down, and down hard.

Energy stocks are off 4.5% on uncertainty surrounding oil prices, conglomerates are down a similar amount. Paper stocks, financials, industrials, biotechs, merchandisers and media stocks are all selling off.

Fears of war are taking down blue chips such as BCE, CP, CP Ships and Rio Alto. Financials are weak on expected losses from the World Trade Center disaster itself, but also the uncertainty surrounding markets generally. Manulife is down 2%, as is Sun Life. Banks are weak, too, led by TD Bank, down almost 3%.

Techs are soft, with names such as BCE Emergis, Zarlink, Celestica, Kasten Chas, ATI and GSI Lumonics all heading down sharply. Other losers include CanWest, Magellan Aerospace and Cara Operations.

Bombardier is up a tick or two today, on hopes that firms will abandon commercial airline travel for smaller private jets. There are also small gains in Husky Energy and Westcoast Energy.

Golds are the big winners though, led by Placer Dome and Meridian Gold, up better than 4%. Kinross, Franco Nevada and Barrick Gold are also making gains.

In business news, 12,962 of Petrobank’s unit purchase warrants, issued in connection with the Barrington Petroleum Ltd. takeover, have been exercised. As a result, Petrobank received net cash proceeds of $11,665,800 and has issued subordinated notes with a principal amount of $12,962,000 along with 777,720 common share purchase warrants.

On Wall Street, after an optimistic open to trading, markets appear to be bracing for conflict. The Dow Jones industrial average is down 244 points at midday to 8,658. The Nasdaq composite index is off 61 points to 1,493. The S&P 500 is threatening to slip into triple digits, down 26 points to 1,006. As in Canada, golds and arms makers are up.

The CDNX is weaker today, off 24 points to 2,813. Volume is on the light side at 13.2 million shares. Techs are down 2.7%, oils are off 2% and miners are flat. Poplar Resources is the top trader, up 14% to 33¢ on 721,500 shares.