Markets are pulling back from some of yesterday’s tremendous gains, but continued bullishness in the gold sector is powering Toronto stocks higher at midday. The S&P/TSX composite index is holding up 17 points to 6,500.

Volume is average at 83.8 million shares, with buyers outnumbering the sellers by about five to three. Winners have a 17:13 edge on losers.

Yesterday’s huge gains were not surprisingly met with some selling pressure this morning. There are slides in financials, real estate, techs and industrials as a result. However, the gold stocks are still booming, up 6.4% today, driving the overall index into positive territory. There’s also support for the golds in telecoms, health care, energy, and materials.

The gold group is powering higher led by Barrick, up 5% in heavy trading. Placer Dome has gained 3%, and there are big gains in small caps such as Kinross, Glamis, TVX Gold, Goldcorp, Bema Gold and Echo Bay Mines.

Joining the golds there’s some strength in names such as Petro Canada, Bombardier, Telus, Angiotech and JDS Uniphase.

Against the buying there’s selling in the financial group. Sun Life is leading the way down, slipping 3% on heavy volume of 1.6 million shares. Manulife Financial has dropped 1.7% on news that it reported net income of $344 million for the second quarter, 13% higher than in the prior year.

Fairfax Financial is weaker again today, Royal Bank is up a bit in active trading.

Other losers today include blue chip names such as Alcan, Shoppers, Four Seasons, Potash and BCE; and, not-so-blue-chip names such as Nortel Networks, ATI, Royal Group Technologies and Ballard Power.

In other earnings news, Bennett Environmental reported a second quarter profit of $1,119,145, up from $289,174 in the quarter a year earlier.

Bowater reported a net loss of US$53.7 million, compared with net income of US$18.6 million in the second quarter of 2001.

In New York, the broader pullback has been enough to overcome strength in the golds. The sellers also got a boost from lower than expected consumer confidence numbers for July. That said, markets have pared their losses significantly through the day. The Dow was once down as much as 150 points, at midday it is off just 40 points to 8,671. The S&P 500 is down five ticks to 894. Nasdaq is more or less flat at 1,334.

The strength in the gold stocks also been a boon to the Canadian small caps. At midday the S&P/TSX Venture index is up 14 points to 1012. Volume remains weak at 11.4 million shares however. Maxim Power Corp is the day’s top trader, up 5¢ to 21¢ on 1.14 million shares traded