Markets are sluggish today amid a deluge of corporate earnings reports. At midday, the S&P/TSX composite index is 34 points higher at 8,702.

Volume is very low at 110.3 million shares, with buying swamping selling by a margin of about five to two. Market breadth is narrower, but still bullish, with winners edging losers six to five.

The big sector strength is in health care stock, specifically biotechs, which is following a similar sector move into biotechs in the U.S.

There are also much more modest gains in golds, energy, materials and telecoms. Consumer stocks and REITs are a bit weaker, but nothing is selling off heavily.

Manulife Financial is leading the trade today, up almost 1% in heavy volume of two million shares, after it announced its latest earnings numbers.

Manulife recorded shareholders’ net income of $428 million for the quarter, 28% higher than the prior year despite the negative impact of a strengthened Canadian dollar, which reduced earnings by approximately $31 million. The firm said that the increase in earnings was driven by broad business growth, the favourable impact of improved equity markets, continued strong credit experience and prudent management of expenses. These positives were partially offset by mixed claims experience.

Elsewhere in the financial group, Royal Bank is up a little, as is TD Bank and Bank of Montreal. Scotia is down though. Sun Life Financial is also higher.

Business news is driving some of the other big trades. Wheaton River is up 2.2% and Iamgold is down 2.3%, after the firms confirmed that they will get hitched. The outcome of due diligence on both sides has both firms’ boards recommending the deal.

In the energy group, Progress Energy and Cequel Energy has agreed to a merger, and an income trust. Both firms are up sharply on the news. Progress has jumped more than 6% and Cequel is 5% higher on news that they will combine to create Progress Energy Trust.

There is also strength in the energy group, with gains in First Calgary Petroleums, Fairborne Energy, Talisman Energy and EnCana. Suncor is down, though.

The biotechs are jumping across the board, as traders on both sides of the border jump on the bandwagon. There’s no real stock-specific news on any of the big winners though. TM Bioscience is up 16%, and there are big gains in Aeterna Labs, Biomira, ConjuChem, Oncolytics Biotech and Diagnocure. Only TLC Vision is down.

The tech side isn’t doing quite as well, despite a 2.2% gain in Nortel. Celestica, ATI, and Hip Interactive are all down however, weighing on the group.

Other losers include Bombardier, CP Ships, Falconbridge, Shawcor, Brascan and Esprit Exploration.

In other earnings news, Noranda Inc. reported earnings of $153 million compared with a loss of $40 million in the first quarter of 2003.

Boliden AB reported earnings of $130-million.

Ipsco posted record quarterly net income of $32.7 million.

In other M&A news, Atco Group has agreed to sell its retail energy supply businesses of Atco Gas and Atco Electric to Direct Energy Marketing Ltd. for a revised purchase price of $90 million, of which $45 million is payable at closing with the remainder to be paid 12 months following closing.

The U.S. markets are having trouble finding any meaningful direction. The Dow Jones industrial average is up just five points at midday to 10,478. The tech-heavy Nasdaq composite index has dropped two ticks to 2,048.

The S&P/TSX Venture index is down a single point to 1,745. Volume is on the light side at 27 million shares. Transition Therapeutics Inc. is the hot stock of the day, up 7% on 868,000 shares traded.