By James Langton

(December 14 – 13:00 ET) – Stocks have been on a roller coaster ride this morning. The TSE 300 opened higher on some strength in the techs, but that was overcome by selling elsewhere.

At midday the TSE 300 is down 32 points to 9,066. Volume is strong at 77 million shares, about two to one in favour of sellers. Decliners outnumber the advancers 12 to seven.

The all-important industrial sub-index is up 2.3% today, but everything else is down. Consumer stocks are off almost 6% after getting blasted with earnings warnings and financials are down 2%. There are also significant slides in conglomerates, mines, oils and paper stocks.

Nortel is doing all the heavy lifting today, up 3.4% on active volume of more than 6 million shares. The stock is rising on the news that it won’t be issuing a profit warning.

“As we enter the last two weeks of the quarter and the year, we remain very confident in our previously stated guidance,” Nortel CEO John Roth said in a statement.

Following Nortel on the upside are Celestica, JDS Uniphase, C-MAC and Alcatel. Canadian Tire, and Uniforet are making gains, too.

But apart from the handful of winners, the market looks gloomy. A few stocks are getting hammered after issuing earning warnings. Most notable is QLT, which is down 30% in heavy volume, after it said the falling euro would hurt its next quarter, keeping it from meeting expectations. United Dominion Industries is taking a similar hit after issuing a warning of its own.

Pricey stocks in the consumer group, such as Research in Motion, Sierra Wireless, Ballard Power, and 724 Solutions are all down. Also weak are Exfo Electro, Dofasco, Domtar and Bombardier.

Financial stocks have been hit with a triple whammy. An earnings warning from Chase-J.P. Morgan is weighing on the sector, as is a report from the Bank of England warning of the possible impact of a hard landing and the risk posed by telecom lending. Finally, November’s Consumer Price Index released this morning hints at rising inflation, which should keep the Bank of Canada from cutting interest rates.

As a result, TD bank is down 4.3% in heavy trading. Scotia has dropped 3.4%. All the other banks are weak, as are insurers, although they are holding up better than the banks.

In business news this morning, the big story is that the U.S. Federal Trade Commission approved the AOL-Time Warner merger after a scant one-hour meeting, paving the way for the creation of an unrivalled media giant.

Gulf Canada Resources Ltd. revealed that it will spend about $1.2 billion on capital expansion in the coming year, with 68% spent on existing development and exploitation projects, and the other 32% tagged for new exploration

In New York, trading is rather subdued, with the Bush victory already priced into the market. The Dow Jones industrial is off 91 points to 10,703.

The Nasdaq composite is down just 14 points to 2,809. The S&P 500 is down nine at 1,351.

Nortel rival Corning confirmed its fourth-quarter earnings estimate today too, pushing both stocks up in support of the techs. However, the Chase-J.P. Morgan warning is weighing on the financials in general and the Dow overall.

The CDNX is down, too, off 22 points to 2,881 on volume of 21.1 million shares. Techs are soft, down 1.2%, with smaller slides in miners and oils. Babylon Technologies Inc is the top trade, debuting at 15¢ with 3.3 million shares traded. Runnerup Dunsmuir Ventures Ltd has gained 300% to 60¢ on 1.4 million shares.