Markets are bounding higher on some stronger economic data in the U.S., suggesting that its recovery may be stronger than feared. At midday, the S&P/TSX index is up 41 points at 6,343.

Volume remains weak at 69 million shares today, with buyers holding an overwhelming three to one advantage over sellers. Market breadth is about dead even however.

On a sector basis, the improvement in sentiment is a rising tide that’s lifting all boats today. Every sector is up, apart from the utilities. Techs are leading the way with a 3.3% gain. There is more modest buying in financials, industrials and diversifieds.

Nortel Networks is powering the techs higher once again, up 7.7% on strong volume of 15.2 million shares. Research in Motion has jumped ahead 7%, too. There are also gains in Celestica and Ballard Power.

The financials are getting cheered by the stronger U.S. economic data and some positive comments out of European financials this morning. Sun Life is leading the way, up 2.6% on 2.3 million shares traded. TD Bank is up 1.6%. Fairfax Financial has gained almost 7%. And, there are gains for CIBC amid news that it is winding up part of its U.S. business.

Other gainers include big names such as EnCana, Molson, Placer Dome, Hudson’s Bay, Bombardier, QLT, Dofasco and Hurricane Hydrocarbons.

There is some weakness in the energy sector though, with notable slides coming in Enbridge, Petro Canada, Arc Energy and Superior Propoane.

Other losers include Domtar, Intrawest, Kinross Gold, Saputo and Mega Bloks.

In earnings news, Power Financial has reported that, for the last quarter, operating earnings were $272 million, compared with $237 million in the third quarter of 2001. Net earnings were $210 million in the third quarter of 2002. In the corresponding period last year, net earnings were $206 million.

Lions Gate Entertainment achieved EBITDA of $6.2 million during the quarter, an increase of 130 per cent compared with $2.7 million in the second quarter of fiscal 2002. The 130% gain outperformed management’s previous guidance. Net income for the second quarter was $300,000.

In other business news, Agnico-Eagle Mines has closed its US$192 million public offering of 13.8 million common shares and 6.9 million common share purchase warrants. The joint-lead managers and joint-bookrunners of the underwriting syndicate were Merrill Lynch & Co. and TD Securities Inc. Co-managers were Scotia Capital Inc., Yorkton Securities Inc., CIBC World Markets Inc., Salomon Smith Barney Canada Inc., Dundee Securities Corporation and Sprott Securities Inc.

And, Datawest Solutions has sold its shares in the TSX Group Inc. The net proceeds to the company total approximately $4.3 million, which will be added to general working capital.

In New York, markets are also rallying on the news of stronger than expected retail sales and fewer job losses. The Dow Jones industrial average is up 80 points at midday to 8m479. The S&P 500 has gained 14 ticks to 897. And, Nasdaq is 31 points higher at 1,392.

The small caps are the only ones not enthused with the U.S. news. The S&P/TSX Venture index is down two ticks today to 944. Volume is on the light side at 11.7 million shares. The top trader is Magnesium Alloy Corp., which is down 5¢ to 10¢ on 500,500 shares.