Stocks are bouncing back a bit today, led by rebounds in financial and energy plays. The S&P/TSX composite index is ahead 41 points at midday to 8,229.

Oil prices broke the US$41 mark this morning, helping to boost those stocks. While bargain hunting seemed to be boosting the banks.

The economic news was mixed, most of it coming out of the U.S. Producer price inflation was much stronger than expected, although energy could be blamed for much of the increase. Economists are now talking about possible interest rate hikes starting in June.

Toronto volume remains weak with a mere 89.7 million shares traded. This is the sort of volume you typically see when U.S. markets are on holiday and many domestic traders don’t bother. That said, the volume is favouring buyers, with buying ahead of selling 44:35. Market breadth is narrowly bullish, with winners edging losers 58:53.

Almost every group is higher today. Golds are a notable exception, down 1% as some of the flight to safety bid unwinds. Materials and REITs are a bit weaker too. Techs are up 1% and the heavyweight financials have gained more than 0.8%. Consumer plays and real estate are strong too.

The banks are ticking a little higher today, but Manulife Financial is the big mover, up 1.4%. Insurer Industrial Alliance Financial is up 3%.

Bank of Montreal is leading the banks up with a 0.6%. Small gains are also coming in Scotiabank and Royal Bank. CIBC is down just 0.1%.

Nortel continues to lead the techs, up another 1.3% today on decent volume. There are also gains in Open Text. On the telecom side, BCE is up, as are Sierra Wireless and Microcell.

Energy stocks are higher thanks to gains in leading names such as Canadian Natural Resources, EnCana, and Petro Canada. Yet, there is some weakness in Enbridge, and Penn West is down 2.1% on news that first quarter 2004 net income was $61 million, compared with $137.9 million in the first quarter of 2003.

Stock specific news is also driving the trade in certain names. Alcan is up a bit on word that Alcan and Alcoa World Alumina LLC have signed a memorandum of understanding to assess the feasibility of developing jointly a 1.5-million-tonne-per-year refinery in the Republic of Guinea, west Africa.

Thomson has a small gain after reporting it has made an offering of US$250 million notes due in 2010. Thomson intends to use the net proceeds of the offering to repay existing indebtedness and for general corporate purposes. Merrill Lynch & Co. is the sole underwriter for the offering.

Royal Group has dropped 10% after reporting second quarter net earnings were $9.4-million, versus net earnings of $5.5-million in the same quarter last year. However, Douglas Dunsmuir, Royal’s president and chief executive officer, commented that Royal’s financial progress “has been held back by compression of the rate of exchange between the Canadian and U.S. dollars, rising material costs, as well as excess capacity.”

Bioscrypt is down more than 6% after reporting a loss yesterday. Vasogen and ConjuChem are weaker, too.

The gold group is generally weaker. Nevsun Resources is down 5.6%. Gabriel Resources and Northgate are down, too. However, there are some winners, with Goldcorp up 1.2% for example. And, Meridian Gold is up 5%.

Other gainers include Angiotech, QLT, Cott, Tembec and Brascan.

In earnings news, Boardwalk Equities Inc., Boardwalk REIT’s predecessor company, reported that net income decreased to $1.2-million, compared with $1.5-million in the same period last year.

Storm Energy said that it saw first quarter earnings of $3.6 million. First Calgary Petroleums reported a US$9.7 million loss in 2003. Yellow Pages Income Fund earned $68.7 million in its first quarter. Isotechnika had a consolidated loss for the first quarter of 2004 of $3.8-million, compared with a loss of $5.9 million in the first quarter of 2003. Inex Pharmaceuticals said its net loss was $5.1 million during the first quarter of 2004.

In other news, Axcan Pharma has obtained the approval of Health Canada and the U.S. Food and Drug Administration to start phase III clinical trials of its anti-ulcer drug.

In New York, stocks plunged on the open today, as the hotter-than-expected PPI started traders to fret about rate hikes yet again. The Dow Jones industrial average is down eight points to 10,037. The tech-heavy Nasdaq composite index is up 11 points to 1,936.