Toronto stocks are getting a lift from the heavily weighted financial services sector on Wednesday. At midday, the S&P/TSX composite index is up 50 points to 7,788.

As well, good economic news continues to flow out of the U.S, with surprisingly strong housing start data. Traders see this as continuing to power the U.S. recovery, and the prospect for strong growth stateside is also helping to take some steam out of the Canadian dollar.

Both factors are generally good for Canadian stocks. Although, Canada’s inflation report was mixed, sending economists to suggest that further rate cuts are not yet in the cards.

Toronto volume remains quite heavy at 174.7 million shares, with buying action outpacing the selling by a margin of about 47:32. Market breadth is close to even, however.

Most sectors are higher today, led by financial services. That sector is up 1.2% on the prospect of stronger growth and higher earnings.

There are also decent gains in consumer stocks, energy, utilities and telecoms. The weak groups are health care, golds, materials and mining stocks.

The banks are powering the way higher on the improving economic fundamentals. Royal Bank is up 1.4%. Bank of Montreal is up 1.6%, and Scotiabank and TD Bank also have 1% gains. Manulife Financial is up 1.6%.

Nortel Networks is leading the tech group higher. It is up 1.7% in active trading. EnCana is leading the energy plays up with a 1.2% gain.

There is strength in names such as Gildan Activewear, Nova Chemicals, Queenstake Resources, Southwestern Resources, Wheaton River, Aurizon Mines, Metallica Resources, and Bonavista Energy Trust.

Royal Group Tech is also up 6%, as its investors applauded the news that it lost $58.2 million in fiscal 2003, after taking a pretax charge of $116 million in the fourth quarter. The charges relate to Royal Building System and foreign operations, certain capital assets and inventories, remaining costs associated with the exit from certain window coverings programs, as well as costs associated with pursuit of sale of shares of the company. The company is also being repositioned after a review of its strategic alternatives.

On the downside, some recent blue chip gainers are backing off. This includes Barrick, Alcan and Abitibi.

There is also selling in Petrobank, MI Development, Norske Skog, Air Canada, Ivanhoe Energy, Ivanhoe Mines, TLC, and Miramar Mining.

Viking Royalty is down 4.4% on news that it earned $8.7 million in its third quarter.

The big loser is Specialty Foods Group, which has taken a 22% haircut on news that it has cut its distribution in half.

In other business news, Stelco has appointed Courtney Pratt as president and CEO. Pratt will replace Frederick Telmer, who has been serving as president and CEO on an interim basis since August.

Michael Donnell has been promoted to president and CEO of Zi Corp., effective immediately. Donnell joined Zi last July as president and chief operating officer.

In other earnings news, Penn West Petroleum reported that it earned $75.0 million in the third quarter, and it declared a special dividend of $1.50.

ARC Energy Trust earned $41.2 million in its third quarter. Shermag Inc. saw its earnings rise to $4.5 million in its second quarter. And, FNX Mining Company said that its third quarter loss increased to $3.0 million in 2003.

In New York, stocks have been making gains on the latest economic news. The Dow Jones industrial average has added 28 points to 9,652. The Nasdaq composite is seven points stronger at 1,889. The S&P 500 is up five points to 1,039.

The S&P/TSX Venture index is bucking the trend, sliding eight points to 1,627. Volume is active at 45.2 million shares. Xentel DM is the most active stock so far, flat at 68¢ on almost 2.5 million shares traded.