Stocks are rallying aggressively this morning after a jobs report in the U.S. suggested that the pace of layoffs may be slowing. Many market pundits have said the biggest risk to the recovery has been the lack of job creation south of the border.

The S&P/TSX composite index is up 44 points at midday to 7613. Volume has revived too, with 144.4 million shares changing hands.

The buying is outpacing the selling by about seven to four. Market breadth is also bullish, as winners outnumber losers by a four to three margin.

Almost every sector is benefiting from the trade, with the biggest gains coming in techs, diversifieds and health care stocks, all of which are up about 1.7% so far today.

Financials are notably stronger, as are consumer discretionary names, industrials and real estate. The safe haven golds are slumping on this trade, down about 2%, while REITs are weaker, too.

TD Bank is leading the trade today after the Globe and Mail reported that the bank is considering buying a big discount brokerage in the U.S. to bolt onto its Waterhouse operation. TD has jumped almost 3% on the news in very heavy trading of 2.6 million shares.

The report is also boosting the shares of the big discount brokerages in the U.S. The other big banks in Canada have hardly budged, however.

Beaten up biotech, Biovail, is bouncing back today, recovering 6% in heavy trading. Bioscrypt and Axcan Pharma are up too. Axcan reported that it is buying three products from Aventis SA for US$145 million.

In the tech space, it’s Nortel leading the way, gaining 1% on seven million shares. Although there are bigger percentage gains in names such as ATI, Descartes Systems, Mitec and Rogers Communications. BCE is up a little, too.

Other gainers are solid old economy companies with names such as Inco, up 2.6%, Alcan, gaining 2.3%. Smaller names such as Canico Resources, Ivanhoe Energy, Hydrogenics and Dynatec are up too.

On the downside, the economic optimism is hurting gold. Placer Dome is down 2.2% in active trading. And, there is selling in Yamana Gold, Bema Gold, Golden Star Resources, Nevsun Resources, Gabriel Resources and Orezone Resources.

Eldorado Gold is down more than 4% on news that it has signed a framework agreement with the China National Gold Group Corporation, giving Eldorado the exclusive right to review certain mining operations and exploration projects owned by CNGC.

Other losers include EnCana, Weston, ID Biomedical and CCS Income Trust.

ID has dropped 6% on news that it has entered into a bought deal with a syndicate of investment dealers led by Canaccord Capital Corporation. It has agreed to purchase 5.8 million units at a price of US$17.37. The net proceeds of the offering will be used for the clinical and manufacturing development of ID Biomedical’s FluINsure and StreptAvax vaccines, working capital requirements, and other general corporate purposes, including potential strategic acquisitions.

CCS Income Trust is down about 4% on news that it has today entered into an agreement with a syndicate of underwriters led by Raymond James Ltd. for a $50 million bought deal financing.

In M&A news, Solitario Resources Corporation’s largest shareholder, Crown Resources Corp., has signed a letter of intent with Kinross Gold Corporation, whereby Kinross will acquire Crown and its 100%-owned Buckhorn Mountain gold deposit located in north-central Washington State. Shareholders of Crown Resources will receive 0.2911 share of Kinross for each share of Crown.

MDC Corp. has acquired the 15% interest of Metaca Corporation it didn’t already own for approximately $4 million.

Intrawest Corp. has sold, on a private placement basis, $350 million in senior notes.

In New York, stocks have been rallying all morning on the news of the apparently improving jobs situation. The Dow Jones industrial average is up 131 points to 9,762. The tech-heavy Nasdaq composite index is up better than 2%, gaining 42 points to 1,936. The broader S&P 500 is up 14 points to 1,048.

Somehow, the small caps are avoiding the rally. The S&P/TSX Venture composite index is unchanged at 1,398. Volume is strong at 39.1 million shares, led by a 6¢ gain in Spartan Resources to 78¢ on 2.2 million shares traded.