Markets opened lower Wednesday morning, but are venturing a rally at midday as the bargain hunters return. The S&P/TSX index is up 91 points to 6,252.

The rebound volume is heavy at 120.3 million shares, although the selling it still ahead of the buying by about seven to five. And, losers outnumber winners by seven to three.

The narrow gains are nonetheless strong in sectors such as energy, financials, and consumer plays. There’s still notable weakness in the gold sector, health care, industrials and telecoms.

The banks are powering the recovery today, following the lead of U.S. banks. JP Morgan Chase held a conference call with analysts this morning to calm fears over its involvement with Enron and some of the other recently-revealed corporate shenanigans. This has apparently helped soothe investors, and helped drive the recovery in stocks.

Canadian banks are enjoying this action, too. TD Bank is up 2.3%, Royal Bank is up 1.2%, as is CIBC. Scotia remains down a bit, while insurer Manulife is flat.

Energy stocks are also very strong, driven by a 6.7% gain in Encana. Duke Energy is up sharply, and Suncor Energy, Precision Drilling and Petro Canada are all stronger.

Other names seeing gains include Hemosol, Teck, Investors Group and Shaw Communications.

Abitibi is up 5.6% on news that it recorded second quarter operating profit today of $99 million, which compares with $51 million in the first quarter of 2002 and $283 million in the same period last year.

There’s still some weakness in the blue chips at midday though, with BCE lower on its latest earnings report. Alcan and Bombardier are down, too.

Gold stocks continue to see weakness as the flight to safety tapers off. Barrick is down 2.8%, and Bema is down, too. But there is also selling in WesstJet, CGI Group, Dupont and Magellan Aerospace.

In earnings news, Agnico-Eagle Mines has recorded second quarter net earnings of $3.4 million, compared with $500,000 in the same period in 2001.

Dofasco has achieved second quarter earnings that are almost triple those reported in the same period in 2001, highlighted by record shipments, higher revenue and lower costs per ton. Dofasco’s consolidated net income was $66.9 million, compared with $24.2 million reported in the second quarter of 2001.

Pioneer Natural Resources had net income of $11 million for the second quarter of 2002, including a $2.8 million extraordinary charge related to the early extinguishments of debt. For the same period last year, Pioneer had net income of $28.3 million.

Toromont Industries ‘s earnings were $11.2 million in the quarter, up 69% from last year.

In New York, the rally has been strong, driven by its banks. The Dow Jones industrial average is up 245 points at midday to 7,947. The S&P 500 has gained 22 points to 820. The Nasdaq composite index has also bounced up 16 points to 1245.

The S&P/TSX Venture index is still weak however, down 35 points at midday to 1012. Volume is average at 13.9 million shares. American Bonanza Gold is the top trader once again, down 6% on 534,000 shares.