Stocks are making solid gains today on news that Canada’s budget surplus was bigger than forecast. At midday, the S&P/TSX index has gained 29 points at to 8,780.

The surplus came in at more than $5 billion, double expectations. The market is also being soothed by testimony from Fed chairman Alan Greenspan, who is talking up the U.S. recovery, if not the greenback.

Volume is solid at 167 million shares, with the buying leading the selling by a 47:32 margin. Market breadth is bullish, as winners outpace losers by a margin of about nine to seven.

Gold stocks are higher, up 1.8%, as the U.S. dollar weakens on Greenspan’s comments. Miners are materials are also up more than 1%.

Biotechs and telecoms are the weak spots, down more than 1%. Real estate issues are notably lower, too.

Barrick is leading the gold group higher, gaining 1.5%. Placer Dome has jumped 3.4% on news that Geologix Explorations has acquired Placer’s interest in a joint venture, between Placer and Teck Resources Inc., of the Silver Cloud property in Nevada.

Elsewhere, old economy stocks are generally strong. Alcan has added 2.7%, Inco has gained 1%, Bombardier is up, and there is strength in Canico Resources, Corriente Resources, Golden Star Resources, and Southwestern Resources.

Noranda has gained 1.7% on news that it returned to profitability in the fourth quarter with net earnings of $64 million, on the strength of the improved operating base and metal prices, pushing net income to $34 million for 2003, an increase of $481 million over 2002.

Energy stocks are giving back some of yesterday’s strong gains though. EnCana is down 1%. Petro Canada is lower, However, Talisman Energy is stronger, as is Cequel Energy.

Among the financials, there are gains in Royal Bank, Scotia, TD Bank, CIBC and Manulife. Bank of Montreal is down a bit, though. Fairfax Financial has dropped 3.7%, following a skeptical article in the Globe and Mail today.

Home Capital Group is the big winner in the financial group, gaining almost 7% on news that the company has now completed 34 consecutive quarter-over-quarter increases in earnings. Net earnings increased to $8.7 million for the three-month period ended Dec. 31, 2003, compared with $5.5 million for the same period in 2002. Net earnings for the year rose 43.3% to $29.5 million, compared with $20.6 million for 2002.

Nortel is a bit higher again today, gaining 1.2%, albeit in relatively light volume. There are also gains in Netgraphe, GSI Lumonics, and Envoy Communications. However, BCE is down a bit at midday, as is Telesystem International Wireless, Hip Interactive and Sierra Wireless.

The big gainer on the day is the Connor Brothers. Income Fund, which has jumped more than 14% on news that Connors Bros. Income and Bumble Bee Holdings L.P. are merging, creating North America’s largest branded seafood company. Under the terms of the transaction agreement, the companies’ operating businesses will be combined in a transaction valuing Bumble Bee at US$385 million.

The big loser, once again, is Tahera. Its big gains continue to unwind, the stock has dropped another 12.4% today in heavy trading.

CAE is down a bit on news that CAE experienced earnings from continuing operations and net earnings for the third quarter of $21.4 million, up from $15.1 million in the second quarter, but down from $31.5 million last year.

Bioscrypt Inc. has dropped 6.7% on news that it lost US$2.9 million in 2003.

QLT is down 4.3% on news that its’ earnings rose to US$44.8 million in 2003. Based on recent sales results and current trends in Visudyne sales, QLT is guiding to 2004 sales in the range of $420 million to $455 million at current exchange rates. Earnings per share for 2004 are expected to range from 74¢ to 86¢.

Also in the biotech sector, Draxis Health is down 4%.

Stelco is leading steels lower, dropping 3.8% today. Also, Harris Steel Group reported that it has completed the transaction with Nucor that saw it sell half its’ US business for US$21 million. And, Slater Steel Inc. reported that the liquidation of one of its’ divisions will be challenged in court by the United Steelworkers.

In other news, ARC Energy Trust saw its’ earnings jump to $290.2 million in 2003.

TVA Group reported net income of $21.5 million for the quarter, compared with net income of $27.1 million for the quarter in 2002. For the fiscal year 2003, TVA Group’s net income was $54.5 million, compared with $52.4 million in 2002.