Stocks are trading lower at midday, following a big jump in U.S retail sales, and the expected interest rate cut by the Bank of Canada. Both pieces of information have traders thinking that long run of rate cuts has finally ended. The S&P/TSX index is down more than 50 points at midday to 8,849.

Volume is much stronger today at 128.7 million shares, with selling swamping the buying by a margin of 85:37. Losers are also outnumbering winners by more than two to one.

The big weakness is coming in core areas such as gold, materials and miners. Golds have dropped 4.3%, materials are down 2.6% and miners are 2.5% lower. Techs and telecoms are both down about 1%.

Financials are holding up quite well amid strong U.S. earnings in the sector, down just 0.3%. The only sectors making any gains, and then only very modest gains, are consumer stocks and energy.

The strong U.S. retail numbers is boosting the dollar and undercutting gold. This, in turn, is hitting stocks. Barrick is 3.8% lower. Placer Dome has slipped 3.6%.

Smaller gold names are much weaker, with big slides coming in Cambior, Crystallex, Golden Star Resources, Glamis Gold, Gammon Lake Resources, Breakwater Resources, NA Palladium and Pan American Silver.

Crystallex announced that it has hired BNP Paribas to provide advisory services to the company in connection with the arrangement of project financing for the development of the Las Cristinas project in Venezuela.

Alcan is leading the blue chips down, dropping 2.2%.

Yesterday’s big winner on the tech side, Research in Motion, is leading that group lower. It has dropped 1.4%. Nortel is flat. And, there is weakness in biotechs such as Forbes Medi-tech and Diagnocure.

Energy stocks are stronger, on higher prices. Nexen is up 1.1%. Petro Canada, Talisman Energy and Canadian Natural Resources are all up impressively. EnCana is unchanged. There are gains in smaller names such as Collicutt Energy Services and Cequel Energy.

Most of the big gainers are up on stock specific news. Spectrum Signal Processing has jumped $3 to $5.40 in heavy trading, on news that it has received a contract valued at approximately $1.2 million from an international defence contractor.

MDSI Mobile, is up 48.4% on news that it is being acquired by @Road, a provider of mobile resource management services, for about $86 million.

ConjuChem has added 14% in strong trading after it released interim results from its phase II clinical trial that is evaluating the company’s treatment for type 2 diabetes.

Other gainers include paper firm Abitibi, which is up 2.7% in strong volume. SFK Pulp Fund is also higher, and. there is strength in Linamar.

In earnings news, Clean Power Income Fund lost $13.5 million in 2003. And, IAT Air Cargo Facilities Income Fund saw earnings slip to $2.7 million in 2003. Northern Orion Resources Inc. saw US$2.4 million in earnings for 2003.

Vitran Corp. has revised its guidance upward for the 12-month period ending Dec. 31. For the three months ended March 31, Vitran expects to report diluted earnings per share in the range of 12¢ to 13¢, down from 14¢ last year. For the 12 months, Vitran expects to report diluted earnings per share of 98¢ to $1.05.

In New York, markets first applauded the strong retail sales and earnings numbers, but after considering the implications for interest rates, stocks began selling off. At midday, the Dow Jones industrial average is down 55 points to 10,461. The tech-heavy Nasdaq composite index has dropped 17 ticks to 2,049.

The S&P/TSX Venture index is taking a real thumping, down 53 points to 1,819. Volume is solid at 36.8 million shares. TM Bioscience Corporation is the top trader, up 7¢ to 63¢ on 1.4 million shares. The firm is moving to the big board.