Stocks are rallying on some strong economic data in the United States. The October ISM survey on manufacturing was much stonger than expected, spurring optimism that the U.S. recovery will remain strong. Weak employment remains the only area of concern.

Nevertheless, the U.S. dollar is soaring on the news, while the loonie is weaker. The gold market has also softened significantly.

At midday, the S&P/TSX index has gained 53 points to 7,826. Volume is decent at 134 million shares, with the buying swamping the selling by a 21:10 margin. Market breadth is also strongly bullish, with winners outnumbering losers 60:47.

On a sector basis, almost everything other than gold is up. The golds are sliding sharply, down 2.7% as the metal’s price falls. There is also a little selling in utilities and REITs.

Everything else is up, led by a 2.3% gain in technology shares. There are also strong gains for basic industries such as miners, energy, industrials and real estate — all sectors which should benefit from a robust U.S. recovery. Financials and health care stocks are higher, too.

Nortel is leading the tech group higher, on news that computer chips are selling better than expected. ATI is up 5% on the news. And, Research In Motion is stronger on news that Vodafone Group plc will be selling RIM pagers in Europe.

There are also solid gains in old economy companies that would certainly benefit from a U.S.-led global economic recovery. Alcan is up 1.6%, Inco has gained 4.5% and Abitibi is up a similar amount. There are also heady gains in stocks such as Ivanhoe Mines and Ivanhoe Energy. Tahera is higher, as is EnCana, First Calgary Petroleums, Hudson’s Bay, QLT, and Imax.

Financial stocks are all rallying, too, with Manulife offering a leading 1.5% gain. There is also decent buying in TD Bank and Scotiabank, both up better than 1%. However, Assante is down 5.4% in active trading.

Atlas Cold Storage is the big loser, dropping 11%, on news that it may have to restate results yet again, and cut its distributions.

Otherwise, it’s mostly golds getting whacked on weak gold prices, with selling in Bema Gold, Golden Star Resources, Queenstake, Iamgold, Wheaton River, Bolivar Gold, Southwestern resources and Agnico Eagle.

In earnings news, Glamis Gold posted net income of $3.5 million for the third quarter of 2003, compared with net income of $2.4 million for the third quarter of 2002.

PetroKazakhstan reported net income of $90.7 million for the third quarter of 2003 — a 49.9% increase over the quarter ended September 2002.

Oncolytics Biotech reports that its net loss for the latest quarter was $1.8 million, compared with a net loss $2 million for the quarter in 2002.

ClubLink reported that its net income declined 16.4% to $7,591,000 from $9.1 million for the quarter.

In M&A news, Tembec has successfully completed the acquisition of the two Nexfor sawmills for $49.2 million, plus working capital of $15 million.

McWatters Mining has agreed to sell its Kiena mine complex to Western Quebec Mines Inc. The total cash consideration is $2 million, including a non-refundable cash payment of $200,000, plus up to $1 million for inventory, stores and equipment, and royalties.

Ketch Resources has entered into an agreement to buy Gauntlet Energy Corp. for total consideration of $44.6 million under a proposed plan of arrangement. Following completion of the plan, Ketch may seek to dispose of certain of the acquired assets of Gauntlet for $15 million to $20 million. The transaction will be effective on completion of the plan in December and will be financed through bank lines to be provided by Ketch’s existing lender. Ketch has also entered into a flow-through common share financing agreement, on a bought deal basis, with an underwriting syndicate led by Griffiths McBurney & Partners, for total gross proceeds of approximately $7.9 million. National Bank Financial Inc. is acting as financial advisor to Ketch in connection with the acquisition of Gauntlet.

In New York, the strong economic data has spurred a rally that has held in throughout the morning. The Dow Jones industrial average is currently up 79 points to 9,880.

The tech-heavy Nasdaq has added 27 points to 1,960, while the broader S&P 500 is up nine points to 1,060.

Only the S&P/TSX Venture index is spoiling the party. It is down just one point to 1,564 on very heavy volume of 60.4 million shares. Inca Pacific Resources is leading the trade, up 1¢ to 27¢ on 1.8 million shares.

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