Economic data keeps North American markets higher

Market breadth is about as even, with the advance-decline tally virtually split down the middle. Interest-sensitive sectors are understandably enjoying the positive inflation indication out of the U.S. this morning – where the core Producer Price Index fell 0.1% for August. Utilities, financials and conglomerates are also rallying, while golds are understandably leading the losers.

High-tech stocks are enjoying strong buying as well, led by blue chips BCE Inc. and Nortel Networks. The investment fund subgroup is leading the buying in the financials.

Statistics Canada reported this morning that the unemployment rate increased to 7.8% in August from 7.7% the previous month.

The hot play remains Air Canada, which has traded almost 4 million shares today, after moving more than 9 million yesterday. The stock was down 40¢ to $10.40, even though Reuters reports the street is putting a $16.50 – $17.50 a share price on Onex Corp.’s proposed merged firm (which would include Canadian Airlines, which is valued at $2). Onex is also expecting a competing bid. Air Canada’s pilots are reportedly considering an offer, and foreign carriers are other logical suitors.

Montreal is following the TSE with a rather mellow rally that has the market up 11 points so far. Alberta is up more than two points, while Vancouver is down a half point.

In New York, markets responded positively to the PPI news this morning, but they’ve since turned generally mixed. The techs have been the most determined buyers, driving the Nasdaq to an all-time high, up 26 points on its way to 2900 on the index. The Dow is up just 29 points of its own, while the S&P has added six points.