Traders are greeting the third quarter with a modest optimism, after a stronger factory orders report surprised U.S. market watchers. At midday, the S&P/TSX composite index is up 21 points to 7,004.

Volume is decent at 97 million shares, with the action heavily bullish, as buying swamps selling by seven to two. Market breadth is much narrower, with winners edging losers 23:21.

There are big advances coming in golds and techs, with both groups racing to more than 3% gains, as the new quarter opens for Canadian portfolio managers. Health care stocks, real estate and materials stocks are strong too. Weighing against this, energy stocks are down 1.2%, and there is modest selling in the consumer groups.

Nortel is powering the techs higher, romping to an 11% gain on heavy volume of 19 million shares.

Golds are also enjoying a heavy bid, with Barrick leading the way higher. There are also big gains in Miramar Mining, Bema Gold, Wheaton River Minerals, and Meridian Gold has gained 9%.

Meridian announced that it has completed the sale of its 30% interest in a joint venture property to Queenstake Resources USA Inc. for $1.5 million and 32 million Queenstake common shares upon closing of the transaction. The agreement also stipulates $6 million in deferred payments and approximately $4 million in future royalty payments.

Ski resort operator Intrawest is also a big winner, gaining 7.5% on the news that Vancouver-Whistler has won the 2010 winter Olympics. The firm runs the big resort at Whistler.

Other notable gainers include Air Canada, which finally has a deal with its pilots. There are also gains in Laidlaw and VSM Medtech.

The financials are active traders, as usual. Sun Life is leading the way with a 1.8% gain. There are also small gains for Great-West Lifeco and Royal Bank. TD Bank is down.

On the downside, there is weakness in energy, after natural gas inventories were reported stronger than expected and prices slipped. The sector is being led by a 1.4% slide in EnCana. Selling is also hitting Progress Energy, Methanex, Cequel Energy, Compton Petroleum, Talisman Energy and Precision Drilling.

Other losers include BCE, Ashton Mining, Shaw Communications, Brascan, and Four Seasons.

In New York, economic optimism is also powering stocks higher at midday. The Dow Jones industrial average has added 52 points to 9,093. The S&P 500 is six ticks higher at 988. The Nasdaq composite index has gained 24 points to 1,664.

A small cap rally makes the bullish case unanimous, with the S&P/TSX Venture index gaining five points to 1109. Volume is modest though at 14 million shares. BioEnvelop Technologies is leading the way higher, gaining 8.5¢ to 30¢, on volume of 928,000 shares.