Stocks are having a tough day today, after some poor corporate news in Europe was followed by some disappointing economic data in the U.S. The S&P/TSX index is down 68 points at midday to 6,538.

The U.S. Institute for Supply Management’s index for July came in at 50.5, its lowest level since January and well below expectations. The report calls into question the strength of the U.S. economic recovery.

The resulting selloff in Toronto is broad-based, catching just about every TSX group in its wake, as economic data calls into question the U.S. recovery. Consumer stocks are leading the way lower, and there’s notable weakness in financials, telecoms, diversifieds, materials and industrials.

Market breadth is also decidedly negative, with losers outpacing winners by a margin of close to three to two. Volume is very weak today at just 68.6 million shares, with selling outnumbering the buying by about three to one.

Financial stocks are providing some downside pressure today after several European financial firms recorded weak results, and the weak U.S. data gave traders pause. CIBC is down about 1.6%, leading the way lower. It is joined by selling in Scotia and Royal Bank. Manulife and Sun Life continue to lead the insurance stocks lower.

The usual tech, telecom and media stocks are down, with Thomson down almost 5%, Telus and BCE each off by 4%, Cognos and Research in Motion have the software stocks down. And, Shaw Communications has dropped 4.3% after it reiterated operating income guidance for fiscal 2002, but said subscriber growth is weaker than expected. And the firm said that it would stop supplying subscriber growth guidance in the future.

There are losses in old economy stalwart names such as Alcan, Barrick, Teck and Echo Bay Mines.

On the upside there’s some strength in tech names such as Celestica, Open Text, and ATI Technologies. C.I. Fund Management is up 4.3% on news of its latest new fund manager hiring. Air Canada’s latest earnings have its stock up 2.7% at midday. there are also gains in Metro, Stelco, Hudson’s Bay and Bonavista Petroleum.

In M&A news, EnCana has purchased from Williams Co.’s producing and non-producing assets in the Jonah field for approximately $539 million.

Also, Centrinity has revealed that it has received an unsolicited expression of interest concerning a possible business combination. Discussions are at a preliminary stage and there can be no assurance that a transaction will occur, it says.

In earnings news, Brascan Financial reported net income of $63 million for the three months ended June 30, compared with $57 million for the same period in 2001.

Industrial Alliance Insurance ended the second quarter of 2002 with net income of $31.8 million, 19% higher than the adjusted earnings for the same quarter last year.

Husky Energy recorded net earnings of $263 million in the second quarter of 2002, compared with $299 million in the same quarter of 2001.

Precision Drilling has experienced diluted earnings per share of 6¢ for the three month period ended June 30.

In New York, the weak data has pushed stock prices down all day. At midday, markets are near their intraday lows. The Dow Jones industrial average is down 210 points to 8,526. The S&P 500 has lost 24 points to 887. The Nasdaq composite index is down 39 points to 1,289.

The small caps have mostly escaped the selling pressure. The S&P/TSX Venture index is more or less unchanged at midday, sitting at 1022. Volume remains weak at 9.2 million shares. ECU Silver Mining is the top trader, down 1¢ to 5¢ on 816,000 shares.