As hot, humid weather engulfed the eastern half of the continent, markets appeared to be suffering from heat stroke.

Profit worries and comments from the U.S. Federal Reserve Board left markets reeling today. In Toronto, the TSE 300 fell 118.10 points to 7,654.20, a drop of 1.52%.

The decline was broad-based. Only three of the TSE’s 14 sub-indices advanced: gold, the usual refuge; paper and forest products; and merchandising. The gold sub-index advanced nearly 2%

The bellwether industrial products sub-index, home of the TSE’s technology stocks, was down nearly 3%. Metals and minerals fell 2.8%. Financial services, yesterday’s hero, fell 1.2%

Volume today was 109 millon shares, with decliners surpassing advancers 572 to 433.

Among the most active stocks, Nortel Networks was a big loser, caught in the fallout from yesterday’s earnings release by Cisco Systems. Nortel fell more than 7%, off 92¢ to 11.68. It was the top trader on volume of over 8 million shares.

Joining it in misery were other tech stocks such as, 360Networks, down 13.33% to 13¢, and ATI Technologies, down $2.60 to $16.07.

Among financial stocks, Manulife Financial shed $1 to close at $47.10, a drop of more than 2%. All of the big banks closed lower, with Scotiabank and TD leading the way.

Also pressuring the sector was Fairfax Financial Holdings Ltd. Fairfax shares fell $15.35, or 6.5% , to $224 after announcing yesterday that its second-quarter profit plunged 45% despite a increase in revenue.

One stock that bucked the downward trend was Methanex. The number two trader on the TSE today added 82¢ to close at $10.43, a gain of 8.5%

Leading the golds higher was American Barrick, which posted an advance of 66¢, or 2.9%, to close at $23.40.

A 3.5% gain in Abitibi-Consolidated was responsible for boosting paper and forest products. The stock rose 40¢ to $11.80.

Sobey’s boosted merchandising, adding on 51¢ to close at $23.25, a gain of 2.2%

The CDNX didn’t escape today’s pessimism. The CDNX index closed down 10.66 at 3,087.61. Trading was heavy on a volume of 36 million shares, with 172 advancers lagged decliners 172 to 192 .

On Wall Street, markets took a turn for the worse after the U.S. Fed released its Beige Book. In its comments the Fed confirmed that the U.S. economy remained sluggish in June and July. It also said that the slowdown in manufacturing was begining to impact other sectors of the economy.

The confirmation sent the Dow Jones industrial average down 165.24 points to 10,293.50, a drop of 1.58%. The S&P 500 also shared the pain giving up 20.87 points to 1,183.53, a drop of 1.73%

But it was the Nasdaq composite index that bore the brunt of losses today. Investors in Cisco Systems knocked shares down 6.6% today. As a result, Nasdaq lost 61.43 points to close at 1,966.36, a drop of 3.03%, and once again falling below the 2,000 mark.