Stocks are sliding Wednesday in a mixed trading session. The S&P/TSX composite index is down 34 points to 6,698, following a notably weaker retail sales report for Canada.

Volume is decent at 102.4 million shares, with the buying ahead of the selling by a margin of 47:40. Market breadth is negative however, with losers outnumbering winners 17:13.

On a sector basis, the bears also hold an edge. The materials are the weakest group, down 1.2%. There is also selling in diversifieds, industrials, financials and consumer stocks. Against this, there is some strength in techs and real estate, but nothing is up as much as 0.7%.

EnCana is leading the trading today, down a bit. It is joined by weakness in blue chips such as Alcan, Abitibi, Inco, Barrick, CP Ships and Falconbridge. The weak sales data is also hitting retail names such as CoolBrands and WestJet.

Financials are the other big source of weakness, amid more data suggesting that the Canadian economy is slowing.

Statistics Canada reported Wednesday that the composite leading index rose 0.1% in April after a 0.2% gain in March, continuing the string of small gains that began in the summer of 2002.

Household demand continued to grow enough to offset weakness in manufacturing, where export demand has slowed. Overall, four components posted gains in April, the same as in March. Four components fell while two were unchanged.

Royal Bank is leading the financials lower, down 0.7% in active trading. There is also weakness in CIBC, Scotia, TD Bank, Bank of Montreal, Sun Life and Great-West Life.

Other losers include CAE, Quebecor, Ipsco, and CFM Majestic.

On the upside, tobacco stocks are heading higher throughout the world after a Florida judge threw out a US$145 billion damage judgement against the tobacco companies in the U.S. It also decertified the massive class action and rebuked plaintiffs’ counsel. As a result, the smokey stocks are higher, and in Canada, these days that just means Rothmans, which is up 3.2%.

The other major gainers are techs and biotechs such as Nortel, Lorus Therapeutics, Mosaid Tech, Celestica, and Aeterna Labs. Other gainers include Southwestern Resources Co., NQL Drilling, Isotechnika and Methanex.

In New York, stocks are down modestly as traders react to the big news from the tobacco suit, a lack of news from Fed chairman Alan Greenspan’s latest congressional testimony, and word of a new audio tape from everyone’s favourite terrorist group, Al Qaeda, promising a “big event”.

On balance, the Dow Jones industrial average is down 25 points to 8,466. The S&P 500 has dropped two points to sit at 918. The Nasdaq composite index is down 10 ticks at 1,481.

The S&P/TSX venture index is four points lower at 1075. Volume is average at 15.8 million shares. Martin Health Group Inc. is the day’s top trader, up a penny to 11¢ on 1.13 million shares.