Markets are holding up today, after the Bank of Canada delivered a 25 basis point rate cut and signaled that it would be ready to cut rates even further if necessary. The S&P/TSX composite index is up 24 points at midday to 8,604.

Volume has revived nicely with the return to work by U.S. traders. 222.9 million shares have changed hands so far, with buying ahead of selling by a 10:9 margin. Market breadth is favouring the bulls decisively, with winners outnumbering losers 14:9.

The rate cut is delivering some solid gains in a broad range of sectors, as traders realize the Bank is ready to fight the effect of the robust loonie. The winners are led by a 3% gain in golds, energy stocks are up 2%, miners have gained 1.7%, and materials are up 1.2%.

Techs and health care stocks are down sharply, however, following some weak U.S. trading. Techs are down 2.4% and health care is 1.5%.

Nortel, and other recent tech gainers, are all suffering some U.S.-led profit taking. Nortel is down 3.3%, with 27.8 million shares traded. Research in Motion has dropped 2%, ATI is down 2.6%, JDS Uniphase has given back 17.7% after yesterday’s big rally. There is also weakness in Celestica, Zarlink Semi, Mitec, Infowave Software, Sierra Wireless, Cognos and Tundra Semi.

Biovail is leading the biotechs lower, dropping 4.4%, and ConjuChem is down 3.4%. Strength in Inex Pharma, Hemosol and Draxis Health is cushioning the fall within the sector.

It’s a strong day for old economy stocks, which have been battered by the stronger dollar. Suncor Energy has jumped 3.6%, EnCana has gained 2%, Penn West is up 2.2%, Inco is leading miners higher. There are gains in names such as Golden Star Resources, Tahera, Sino Forest and Northgate Exploration.

The financials are mostly higher today, with rates heading down, financial chiefs bandying around merger scenarios at a conference hosted by RBC Financial, and U.S. banks reporting their results. CIBC is leading the way, up 1.5%, followed by TD Bank with a 1.4% gain. Bank of Montreal and Royal Bank are both higher, but insurers Manulife and Sun Life are sliding.

In business news, as expected, Magna International’s Belinda Stronach has resigned as president and CEO to pursue the leadership of the new federal Conservative party. Her father, Frank Stronach, has assumed the position of interim president.

Shaw Communications said that it experienced increased revenue, net income and free cash flow in the first quarter ending Nov. 30. The company recorded $19.9 million in net income, ending three years of negative net income.

Delta Systems says that it expects fourth quarter 2003 revenue to be in the range of $2.2 million to $2.4 million. Expected 2003 fourth quarter revenue will decline from the $2.7 million generated in 2002 primarily due to weakness in orders received during the summer of this year.

Barrick Gold reports that it has reached full-year production for 2003 of 5.51 million ounces, at an average cash cost of $189 per ounce.

Danier Leather said that it earned $8.98 million in its second quarter of fiscal 2004.

Procyon Biopharma reports that it has been granted a US patent relating to its antiretroviral program. The patent protects a series of novel small molecules that demonstrate inhibitory activity against the HIV aspartyl protease and the whole virus in cell cultures.

In New York, traders returned to work from yesterday’s holiday and immediately began locking in profits from recent gains. The Dow Jones industrial average is down 68 points at midday to 10,533. The Nasdaq composite index has dropped six ticks to 2,135.

The S&P/TSX Venture index has shown the most strength today, adding 18 points to 1,793. Volume is heavy there too, at 46.7 million shares. ZAQ Inc. is leading the way, gaining 9¢ to 70¢ on more than 3.5 million shares.