Stocks are sliding in relatively modest trading Monday. At midday, the S&P/TSX is down 12 points to 7,978.

Canadian housing starts came in weaker than expected, but an economic activity index reading was strong, bolstering hopes for an economic recovery. However, with a Federal Open Market Committee meeting slated for tomorrow, many traders are reluctant to make any big bets one way or the other.

Toronto volume is on the light side at 134.1 million shares, with the buying edging the selling by a margin of 32:29. Market breadth is decidedly negative however, with losers outnumbering winners six to five.

Health care stocks are weakest, down 1.5%. There is also some selling in golds, industrials and financials. Energy stocks and utilities are providing the upside resistance.

Financial stocks are active today, mostly to the downside. The big loser is Sun Life, down about 2% on news that its’ U.S. mutual fund arm, MFS, was notified by the Securities and Exchange Commission that it may face enforcement action. Joining Sun Life on the downside is TD Bank, Bank of Montreal, National Bank and Manulife. Power Corp. is down, too. However, there is buying Royal Bank and Scotia.

Golds are weaker, led by a 1.3% slide in both Placer Dome and Barrick. Southwestern Resources is down about 4%, and Yamana Gold is off 4.4% on news that it has entered into an agreement with an underwriting syndicate led by Canaccord Capital Corp. and BMO Nesbitt Burns Inc., for a $20-million bought deal. The company plans to use the net proceeds of this financing for the advancement of its mineral properties, potential acquisitions and for general corporate purposes.

Also in gold financing, Nevsun Resources has entered into an agreement with a syndicate of underwriters co-led by Salman Partners Inc., Dundee Securities Corp. and Haywood Securities Inc., and including BMO Nesbitt, Canaccord, and Westwind Partners Inc. for a $47.6 million private placement.

On the upside in the gold group, Wheaton River is 2.6% higher on the day. Great Basin Gold has gained 11.5%, and there is strength in High River Gold, Blackrock Ventures and Crystallex.

Nortel is leading the tech group down, off 0.7% at midday. Sierra Wireless is down 9.4%, Geac Computer is off 4.5%, Cinram and ATI are down too. Hemosol is leading the biotech group lower, giving back about 10% today, after heady gains last week. However, Biomira is stronger.

Other losers include Bombardier, CoolBrands, and both Ivanhoe Energy and Ivanhoe Mines.

Assorted gainers include Manitoba Telecom, EnCana, Stratos Global, Sherritt, Slocan and Canfor.

In financing news, Fairmont Hotels & Resorts has completed the previously announced issuance and sale of convertible senior notes totalling US$270 million.

Impact Energy has entered into a bought-deal private placement for total gross proceeds of approximately $5.4 million. The underwriting of the private placement is being co-led by Griffiths McBurney & Partners and FirstEnergy Capital Corp., and also includes Orion Securities Inc. The net proceeds received from the sale of the common shares will be used to assist in financing Impact’s continuing natural gas exploration program.

On the M&A front, Pivotal has entered into a definitive arrangement agreement with chinadotcom corporation through its software unit, CDC Software Corp., that will see CDC acquire Pivotal for US$2.14 per share.

Murphy Oil says that it intends to sell its interest in various conventional oil and gas properties in Western Canada. Murphy anticipates completing the sale by the end of the second quarter of 2004 and has retained professional advisers to assist in the process.

In corporate news, Donald Tartre, Stressgen’s vice-president and chief financial officer, will resign his position at Stressgen to serve as a senior financial executive for a large, commercial biotechnology company. Tartre is expected to leave the company by mid-January, 2004, and will be replaced by Gregory McKee, currently the company’s vice-president, corporate development and strategic planning.

In the U.S., markets remain low-key ahead of tomorrow’s Fed meeting. The Dow Jones industrial average is up 34 points at midday to 9,897. The Nasdaq composite index is down by four points to 1,934.

The S&P/TSX Venture index is also sliding by three points to 1,731. Volume is strong there at 47.6 million shares, with trading led by Mandorin Goldfields. It is up 6¢ to 15¢ on almost 3.5 million shares traded.

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