Stocks are bouncing a bit this morning, driven by corporate earnings announcements and mixed economic news. At midday, the S&P/TSX index is up 27 points to 7,747.

Consumer inflation in Canada trumped analyst expectations of a flat reading with a 0.2% jump in September, calming calls for further rate cuts. However, weak wholesale sales were reported for August, dimming the outlook a bit.

TSX volume is decent at 140.4 million shares, with buying more than triple the selling action. Market breadth is also bullish, as winners outnumber losers by a margin of about seven to six.

Gold stocks are notably higher, gaining almost 3%. Barrick is leading the gold group higher, with a 2.6% gain on strong volume. There is also solid buying in Nevsun Resources, Golden Star Resources, and Great Basin Gold.

There are smaller gains in a broad selection of sectors such as materials, health care, techs and industrials.

Nortel is leading technology issues higher. The stock is up 0.7% on volume of 9.1 million shares. There is also buying in Research in Motion, Bakbone Software, Systems Xcellence, Leitch Technology and Oncolytics Biotech. Descartes Systems and Ballard Power are weaker though.

However, good news is driving solid gains elsewhere. TSX Group is a big winner, up more than 5.5% on news that it expects to beat analysts’ estimates.

Canadian National Railway is up about 1.7% on news that third quarter profits rose 10% to $294 million, despite the stronger Canadian dollar reducing net income by approximately $14 million. This compares with net income of $268 million for the comparable quarter of 2002.

Other gainers include Ipsco and Bennett Enviro.

The only weakness is modest sliding in telecoms and consumer discretionary stocks.

There is selling in Air Canada, Ivanhoe Energy, Bioscrypt, Canfor, Quebecor, FNX Mining and Corriente Resources.

Fairmont Hotels reported a huge fall in third-quarter earnings. It reported that its EBITDA was down $27.3 million or 36.8% to $46.9 million in the third quarter. This decline was driven by weaker results at the Canadian hotels as a result of SARS and a $7.4 million provision relating to hurricane repairs. Fairmont also is lowering its forecast for the remainder of 2003.

In other earnings news, FirstService Corp. has posted net earnings of $9.1 million for its second quarter, up from $8.9 million in the same period one year ago.

On the M&A front, software maker Open Text said it is buying Germany’s Ixos Software in a deal worth about 200 million euros or $307 million.

In New York, stocks have traded in a tight range all day, with the Dow Jones industrial average currently off 10 points at 9,768. However, techs are stronger with the Nasdaq composite index up 17 points to 1,942. The S&P 500 has gained three points to 1,048.

The S&P/TSX Venture index is also up six ticks to 1,448. Volume is on the light side at 33.7 million shares. The top trader is Dynacor Mines, which is up 5¢ to 43¢ on 2.4 million shares.