By James Langton

(September 5 – 13:00 ET) – Stocks are sliding in lacklustre trading this morning. At midday the TSE 300 is off 45 points to 11,343. Volume is lower than last week at 67 million shares, though it is about 2:1 in favour of buyers. Advancers are outpacing decliners about 7:6.

Although there are positive market internals, the power of Nortel Networks has dragged the index down. Nortel is off almost 2% in active trading, and that’s enough to slug the market. There’s nothing negative out about Nortel today, just a general distaste for tech stocks.

U.S. Bancorp Piper Jaffray analyst Ashok Kumar came out negatively in his outlook for Intel. His comments and some weakness in Yahoo! have combined to drag down the tech stocks across the board. Also sliding are JDS Uniphase, Exfo Electro and Mosaid.

Nortel has the industrials sub-index down more than 1%, other losing sectors include media and merchandisers, although the slides are moderate. The upside is centred in tobacco, transports and oils.

Repap is the top trader once again today, up half a cent on 7.4 million shares to 20.5¢, beyond its takeout price. The other big penny stocks, Heritage Concepts and William Multi-Tech, remain active.

Geac Computer is up sharply, gaining 21% in heavy trading, on news that it is considering a possible sellout and has hired CIBC World Markets to broker a deal. Also up nicely are tech names such as Certicom, Janna, and 360 Networks, with individual supply deals driving each of them.

The insurers are sliding after last week’s big runup. Sceptre is up 65¢ in light trading after announcing its alliance with Putnam Investments.

In New York the action is light, and the tone negative. The Dow is off 10 points to 11,229.

Banc of America Securities downgraded the whole drug sector this morning, hitting that group in particular, and the Dow in general.

The Nasdaq composite has dropped 74 points to 4,160, on the comments from analyst Kumar. The S&P 500 is down 14 points to 1,506.

America Online is also a big mover on the downside on news that the Federal Trade Commission may block its merger with Time Warner unless it dumps its affiliation with AT&T and agrees to let competitors use their cables.

The CDNX is the lone positive market, up a mere 1.5 points to 3,587. Volume is strong at 24 million shares, with techs leading the way up. Mines and oils are up slightly. First Trimark is the top trader up 240% to 51¢ on 1.4 million shares.