By James Langton

(June 23 – 13:00 ET) – Stocks are up in a lazy morning of trading. The Toronto Stock Exchange 300 has gained 37 points to 10101 on sparse volume of just 64 million shares. The volume is slightly positive, but the decliners are edging advancers 9:8. Strength in the financials and conglomerates is outweighing a strong software sell-off, and drops in gold, paper stocks and utilities.

The financials are strong on the back of the banks. The mutual fund companies are also moving notably today. The banks are riding on the prospect of no more rate hikes and applause for their recent strategic moves. Scotia is leading the bank pack today, up almost 3%.

AGF is leading the fund companies higher in the wake of analyst plaudits for yesterday’s results and future prospects. The stock is rated a strong buy at Scotia Capital, and a buy elsewhere on the street. On that news its up about 8%. Trimark is inching up toward its $27 takeout price on strong volume. HSBC’s preferred shares debuted this morning and have ben well received, adding almost 14% so far.

Nortel Networks and BCE are moving in opposite directions today, essentially cancelling each other out. Some of the techs are up in sympathy with Nortel, including Sierra Wireless, Research in Motion, Ballard Power, and biotechs, Biovail and NPS Allelix.

The software sector is being gutted. It’s down about 5.4%, led by CGI Group. CGI has dropped 27% on huge volume of 3.2 million shares as analysts across the street cut their ratings on the stock. Th firm issued a profit warning after the close yesterday. The whole sector is taking a hit too, with CGI joined on the downside by 724 Solutions, Cognos and BCE Emergis.

The street’s other big losers are less glamourous names such as Weyerhaeuser, Four Seasons and Gildan Activewear, but they are knocking stocks back too. Profit-taking action is hitting a number of the techs and oil stocks, as is month-end, quarter-end window dressing.

The small caps are sliding this morning, pushing the CDNX down 14 points to 3477. Volume is surprisingly strong for a June Friday at 19.3 million shares. Miners are leading the losers, joined by the techs. The energy stocks are strong again though. East Side Capital is the hot stock, up more than 100% on 1.6 million shares.

In New York, the market is rather divergent. The techs are down on worries over Amazon.com expressed by influential analysts Mary Meeker and Henry Blodget. Amazon is down as much as 23%. The old economy stocks are strong however, led by gains in JP Morgan. It was also announced that ConAgra Inc. will buy International Home Foods Inc. forUS$2.9 billion.

Currently the Dow is up 73 points to 10449. Nasdaq is off 31 points to 3905.The S&P is splitting the difference, up just two points to 1454.