Markets are modestly higher as profit optimism holds sway with traders Friday.

At midday, the TSE 300 is up 36 points to 7,854.

Volume is average at 89 million shares, with the buying dominating the selling by about 17:10. Market breadth is a dead even split between winners and losers.

Financials are leading the way higher today, with banks up about 1.5% at midday. There’s also some strength in utilities, and modest gains in golds and consumer stocks. The gains are restrained by selling in energy and real estate, and indifference in most other sectors.

Bank of Nova Scotia is leading the banking group higher at midday, up 2.3% on strong volume. Traders are apparently relieved that the bank won’t be throwing good money after bad into its Argentine unit, instead letting the venture collapse.

Royal Bank is up about 1.8% in modest trading, and there are gains in CIBC and TD, too. Sun Life is up 1.5% on the insurance side.

Apart from the banking group, there’s buying in a variety of names. TransCanada Pipelines is rallying strongly, up 3.3% on heavy volume. There’s also strength in other old economy names such as Newmont Mining, Meridian Gold, Domtar, and the ultimate old economy firms, Extendicare and Shoppers Drug Mart. But new economy names such as Wescam, Bell Canada International, Mosaic Group and Bennett Enviro, are rallying, too.

Nortel Networks is weaker today on news of still more layoffs. It is down another 2.5% to $6.17 on strong volume of 8.3 million shares.

There’s selling in Ballard Power, QLT and Rogers today. Baytex Energy is also weak, as is Hudson’s Bay, Westaim, Sobeys and Tembec.

In business news, Eldorado Gold says that it will restate its 2000 and 2001 financial statements following a review by the company and its auditors, PricewaterhouseCoopers LLP. The gold producer has decided that the $10 million convertible debentures it issued in 1994, should have been accounted for as debt. The adjustments have resulted in a $4,623,000 net loss in 2001 rather than a $3,887,000 net loss as previously reported. And a cut in 2000 net income to $433,000 from $1,106,000.

In other news, Brascan has completed its issue of subordinated debentures for net proceeds of $121.0 million, to be used for general corporate purposes.

Also, Newfoundland Power’s earnings for the first quarter were $10.3 million, down 16% from the first quarter of 2001.

In New York, stocks are trading a bit higher in a rather subdued session. The Dow Jones industrial average is up 38 points to 10,243. The S&P 500 is up a point to 1,126. Nasdaq is down two ticks to 1,800.

The S&P/CDNX index is more or less flat, up just half a point to 1,160. Volume is average at 17.8 million shares. Osprey Energy is the top trader, up a penny to 42¢ on almost 1.1 million shares.