Early optimism has evapourated and at midday the market is trading down. The Toronto Stock Exchange 300 composite index is down 29 points to 7702. Volume is extremely weak today at 50.4 million shares, though sellers are outpacing buyers by five to four. The same split between winners and losers is evident in the market breadth, with losers holding the five to four edge.

Financials are the big weak spot today. They’re down about 1% after Citigroup reported a big profit jump for the first quarter, but not big enough for analysts. There’s also broad weakness beyond the banks in sectors such as industrials, miners, utilities and consumer stocks. Ahead of a possible rate hike tomorrow, traders are being cautious.

With not a lot of market cap moving so far today, the blue chips are having a big impact on the averages. Royal Bank is leading the financials down, off almost 1% on 600,000 shares traded. There’s also notable selling in insurers, Clarica and Industrial-Alliance.

Other big blue chips weighing on the market include Weston’s. It’s down 1.5% in active trading. BCE, CN Rail, and Bombardier are all down on active volume too. The volume isn’t that great, but there are notable percentage losses in names such as Metro, Stelco and Kinross Gold.

The strength today is centered in energy stocks. Telecoms are also gaining a bit today. Techs are flat. Nortel Networks is about unchanged, with a respectable 2.7 million shares traded. Celestica is down. So is MDS and Ballard Power. Opposing the selling, there are gains in JDS Uniphase, BCE Emergis, CGI Group, Telus and Vivendi Universal.

The energy sector is gaining on price gains in the crude oil market. Encana is up in active trading, as is Suncor Energy. There are also gains in Maax and Algoma Steel.

Fairmont Hotels & Resorts is up 3% on news that income from continuing operations was $13.6 million for the first quarter of 2002, compared to a loss from continuing operations of $4.5 million in the prior period. Operating results significantly surpassed expectations and reflect better business trends than anticipated, it said. It also increased its previous EBITDA and EPS guidance for 2002.

The S&P/CDNX index is bucking the trend, gaining two points to 1159. Volume is on the light side there too at 13.5 million shares. William Multi-Tech Inc is the top trader once again, adding 1¢ to sit at 2¢ on 345,000 shares.

In New York, markets are weaker at midday as traders take stock of the first quarter profit picture. The Dow Jones industrial index is down 101 points to 10089. The Nasdaq composite index has dropped 10 ticks to 1746. The S&P is down nine points to 1102.