Markets are shrugging off some of their early concerns about the U.S. recovery to trade higher today. The S&P/TSX index is up 37 points at midday to 6,809.

Volume is very strong at 174.5 million shares, with the buying swamping the selling by a three to one margin. Market breadth is also very bullish, with winners outnumbering losers by about nine to seven.

Most TSX sectors are up, led by gains in diversifieds, techs, golds and financials. There is some modest weakness in real estate and health care names.

Markets should be rallying strongly on the heels of another bullish jobs report in Canada, but the shockingly weak report in the U.S. was weighing on traders. Once U.S. traders got over their negative feelings, markets were freed to head higher.

Nortel is leading trading, up about 6.6% on massive volume of 43.6 million shares. There are also notable gains in names such as Celestica and JDS Uniphase.

Bombardier is a force for good in the markets today, too, trading almost 4% higher on strong volume. BCE is up, as is CCL Industries, Royal Bank and Canada Life.

Gains are also coming in a handful of small miners such as McWatters, South American Gold 7 Copper, Iamgold, Repadre and Peyto Explorations.

On the downside, the losers include everything from toys to techs. There is some weakness in ATI, Corus, WestJet, and Mega Bloks. Rio Alto is down, as is Southwestern Resources.

TVI Pacific is the big loser, dropping 29% on heavy volume after it said that the only news that could account for drastic swings in its price and large volume has been the unequivocal support of the Philippine government to TVI and its Canatuan project despite the ambush of one of its company trucks in the jungle there in late December.

In New York, markets opened sharply lower on the bad jobs report, but traders got past that and moved the markets back up. At midday, the Dow is up two ticks at 8,779. The S&P 500 has gained a point to 929. And, Nasdaq is up nine points at 1,448.

The S&P/TSX Venture index makes the modest rally unanimous with a two-point gain to 1,115. Volume is strong at almost 28 million shares. The top trader is Talware Networx, flat at 12¢ on 2.5 million shares.