Equity markets got an early boost from some positive news in the U.S. Friday morning, until consumer confidence data suggested that the future might not be quite as rosy after all. Stocks have pulled back in response and at midday the S&P/TSX index is down seven points to 6,857.

Volume is strong for a summer Friday, at 83.3 million shares, with buying outpacing selling by a margin of 43:37. Market breadth is modestly negative though, as losers outnumber winners by about nine to eight.

Stocks looked set to open higher this morning on much stronger than expected U.S. retail sales data, and some good corporate news. And there are gains in health care stocks, techs, telecoms and consumer discretionary names.

However, by mid-morning a big drop in consumer confidence had been reported and those early gains evaporated. The weakest groups are diversifieds, utilities, materials and financials.

The banks are really leading the way down today, with a 1.6% drop in Royal Bank, a 1.8% loss by Bank of Montreal, and a 1% slide by Scotia powering the way lower. TD Bank has lost 0.6%, and Laurentian is down 1.8%, too.

Alcan continues to be hit by selling. There’s also weakness in Inco, Falconbridge, Cameco, EnCana, and Shoppers Drug Mart.

There’s a bit of weakness in tech stocks, with drops in Celestica, Royal Group Tech and Descartes Systems. However, Nortel Networks is enjoying lots of bottom fishing, up 5% in heavy trading of more than 20 million shares. JDS Uniphase, Telus and ATI are all stronger, too.

The biotechs are finding buyers today, with gains in Biovail and Angiotech leading the way higher. There are also gains in CHC Helicopter and Shaw Communications.

In New York, early gains on the strength of big retail sales were quickly torpedoed by the news that those gains may be fleeting as consumer confidence evaporates in the face of continuing corporate scandals.

The Dow Jones industrial average is down 65 points at midday to 8,737. The S&P 500 has lost just a single point to 926. And, the Nasdaq composite index is defiantly up nine points to 1,384, as bargain hunters carry the day.

The S&P/TSX Venture index is little-changed at midday today, down less than a point to 1131. Volume is quite weak at less than 12 million shares. The top trader is American Bonanza Gold, down 1¢ to 9¢ per share on 479,000 shares traded.