Toronto stocks are clinging to small gains this morning as traders face off over profit prospects.

The TSE 300 is up 12 points at midday to 7,544.

Volume is huge at 157 million shares, although a big chunk of this has come in a few massive block trades. Volume is favouring sellers three to two over buyers. The split between winners and losers for the morning is about even.

Chemicals stocks and golds are rebounding today, Food stocks, wholesalers and transportation equipment are up. Techs are weak, as are miners. But most sector moves are modest.

The volume picture is being distorted by C.I.Fund Management Inc., which has seen National Bank cross almost 47 million shares in some huge block trades.

Tax planning trades by mutual funds typically account for these huge volume moves in December, with very little price change.

Apart from C.I., the big movers are techs. Celestica is leading the way down, followed by Solectron (the former C-Mac), Nortel Networks, Bell Canada International, Mediagrif, JDS Uniphase and BCE Emergis.

There is some strength in technology, but not great volume in names such as Centrinity, Geac, Research in Motion, Microcell, and Royal Group Technologies.

There are also gains on strong volume in Investors Group, BCE, Bombardier, Weston, Sobeys and WestJet. Consumer stocks are generally getting a boost from higher earnings guidance by Proctor & Gamble, which is boosting profit hopes for household stocks generally. CAE and Goldcorp are also up. Other losers include Aber, Inco and Fairfax.

In business news, the TSE has accepted TVX’s buyback bid for up to 17 million common shares, which represents 4.8% of its outstanding common shares.

Saskatchewan Wheat Pool has reported that it lost $12.4 million in its first quarter. It blames the poor results on last summer’s drought impact on Western Canadian agri-businesses.

CP Ships reports that it has arranged a $350-million credit facility with Citibank NA. Closing of the underwritten portion of the facility is expected by the end of the year. Oddly enough, CP Ships plans to use the cash to invest in ships.

Finally, Dominion Bond Rating Service is confirming the ratings of Noranda Inc., but the trend has been changed to negative to reflect the deterioration of the firm’s balance sheet over the past several years.

In New York, stocks opened higher fueled by the P&G announcement, but the recent warning from Merck and a new warning from American Express has soured traders on drugs and financials, sending stocks lower.

The Dow Jones industrial average is down 70 points to 9,818. The Nasdaq composite is off 23 points to 1,979. The S&P 500 has dropped nine ticks to 1,127.

Over at the CDNX, stocks are down. Volume is strong at 16 million shares, but the S&P/CDNX Composite Index is down two points to 995. Luxell Technologies Inc is the top trader, flat at $2.70 on over 1 million shares traded.