Markets are rallying Friday on evidence that the U.S.-led attack on Iraq is proceeding reasonably well. Optimism that the conflict will be brief, and cause little damage to Iraqi oilfields is boosting equity markets.

The S&P/TSX index is up 43 points so far to 6,518. Volume is much heavier today at 137.4 million shares, with the buying tripling the selling. Market breadth is also bullish, although much narrower, with winners edging losers by a margin of five to four.

The gains are broadly based, with techs leading the way, up 2.4%. There is also strength in consumer plays, financials, health care and real estate.

Golds are the only group showing any notable weakness, down 1.7%, as the flight to safety bid unwinds a little.

The banks are powering the way higher on heavy volume. Royal Bank is up 1.6% on 2.6 million shares. Bank of Montreal and CIBC are up more than 1% on strong volume. On the downside, Sun Life has dropped 1.7% on big volume of 2.9 million shares, and Manulife is down, too.

Nortel is powering the tech stocks higher, gaining 3% on very strong volume of 21.6 million shares. Bigger gains are coming in ATI and Geac Computer.

Other notable gainers include BCE, EnCana, Shaw Communications, Decoma, Quebecor, Brascan, Neurochem, Fairmont Hotels and Four Seasons.

There is weakness in golds and in the energy sector. First Calgary Petroleums is down 8.6%, and Transalta has dropped too. There are also drops in Glamis Gold, Kinross Gold, Meridian Gold and Iamgold.

Forzani and GTC Transcontinental are down, too.

In business news, AltaGas Services reported that Gary Holden has accepted the position of president and chief operating officer effective April 1.

The investor optimism for a brief war with Iraq is powering the U.S. markets higher,too. The Dow Jones industrial average is up 108 points to 8,395. The S&P 500 is up nine points to 885. The Nasdaq composite has gained eight points to 1,411.

The small caps are the only group showing weakness. The S&P/TSX Venture index is down just over a point to 1058. The volume is not enjoying the same bounce as the senior stocks though, coming in at 15.2 million shares. Spider Resources is the day’s top trader, flat at 14¢ on almost 4.1 million shares.