By James Langton

(January 5 – 13:00 ET) – Markets seem a little nervous at midday. The anxiously anticipated U.S. jobs report came in this morning rather benign, sparking various questions among marketwatchers. Will the U.S. Federal Reserve lower rates aggressively than it lowered them this week because of other undetected troubles? Is a recession actually looming?

The Toronto Stock Exchange 300 composite index is down 120 points at midday to 8785. Volume is strong at 76 million shares. It’s about evenly split between buyers and sellers. Losers outnumber the winners 9:8.

Industrials are leading the way down, as tech euphoria ebbs away. Consumer stocks, financials, paper and real estate are also weak. Miners are the strongest group, followed by energy stocks and conglomerates.

Nortel Networks is leading the way down. It’s off more than 6% on strong volume of almost 5 million shares. Plenty of other techs are taking a beating today too. Research in Motion is getting hammered, down $12.25 to $ 73. Other names such as JDS Uniphase, C-MAC, Celestica, Descartes Systems, Janna and Ballard Power are all down.

The financials are dogging the techs, after following them up earlier this week. TD is the leading loser, but it’s hardly alone, with all the big banks down. There’s unusually heavy volume in National Bank, today, too, although the stock is unchanged. Fears of a calamity at Bank of America based on its loan exposure to faltering California power utilities is also hitting the banks.

Some of the investors that are dumping the banks, are heading to insurers. Manulife Financial, Sun Life and others are recovering ground lost over the past couple of days.

Other winners include old economy stalwarts such as Alcan, Alberta Energy, Canadian Natural Resources, Bombardier, Northstar Energy and Burlington Resources.

The CDNX is down modestly today. It’s off 7 points to 2940 on light volume of 14.5 million shares. Techs are weak today, overwhelming strength in its oil stocks and miners. Unique Broadband is the top trader, up 15% to $2.40 on more than 1.2 million shares. There’s no news from the firm, but plenty of talk about it in the chat rooms concerning its prospects.

In New York, early strength has dissipated too. At midday, the Dow Jones industrial average is down 206 points to 10705. The NASDAQ composite index is off 110 points to 2456. The S&P is off 25 ticks to 1308.

Fear of trouble at Bank of America is hitting financial stocks, even though the bank has come out with a statement intended to calm fears. The stock is down 7%. While traders are bailing out of techs such as HP, IBM after earnings warnings from Sapient and Next Level, the old economy names are down, too, on profit concerns. Alcoa and Wal-Mart are among the losers.