The market opened on a down note Friday, following some negative corporate and economic news in the U.S. However, markets have reversed their track and at midday S&P/TSX index is now holding a 17 point gain at 6,354.

Volume remains fairly strong at 96.2 million shares, with buying ahead of the selling by about 32:13. Market breadth is also positive, with winners outnumbering losers by a margin of about 10 to seven.

Most of the TSX sectors are up at midday, with solid gains coming in the tech area, telecoms, golds, health care, consumer stocks and industrials. However, weakness in the financials is still weighing on the trade. Most other sectors are little changed.

There is big trading in the financials, as the banks give up some of yesterday afternoon’s merger-talk driven gains. Royal Bank is leading the way, down 0.7% in heavy trading. Bank of Montreal isn’t far behind, sliding back on a volume of 2.8 million shares. The big insurers, Manulife, Sun Life and Canada Life are all down, too. CIBC is the one notable gainer in the group, up 0.7% on 1.4 million shares. Fund firms C.I. and Investors Group are also up.

Opposing the financials, there are some strong gains in the energy sector, led by TransAlta, Enbridge and EnCana.

Techs are up once again, with another 3% gain in Nortel Networks on more sober volume of 17 million shares. Open Text, QLT an ATI are up too. Although, JDS Uniphase is down almost 9% in active trading. MDC is down, too.

Other gainers include transports, Air Canada and Bombardier. CN Rail, however, is down. Golds are up, driven by Placer Dome’s 1% gain on strong volume.

Other losers include Noranda, Tesma International, Nexfor and Nova Chemicals.

In business news, Westport Innovations’ net loss for the second quarter was $13.63 million, compared with a loss of $14.35 million for the same quarter in the previous year. Excluding a $1.36 million one-time, non-cash expense for writing down a long-term investment in CryoFuel Systems Inc., the loss was $12.28 million for the quarter.

Also, Atco has achieved earnings of $26.3 million, compared with $24.3 million for the corresponding period in 2001. Increased earnings were primarily due to stronger results in Atco Midstream and Atco Frontec.

Canadian Utilities had earnings of $44.4 million in its latest quarter, compared with $41.2 million for the corresponding period in 2001.

In New York, the trade has followed the same scheme, dropping on the open, but rallying through he morning. The Dow is up 46 points to 8,364. The S&P 500 has gained six ticks to 889. Nasdaq is up 18 points to 1,317.

The small caps are up too, with the S&P/TSX Venture index gaining two ticks to 902. Volume remains on the light side at 11.4 million shares. Hydromet Environmental is the top trader, down 1¢ to 2¢ on strong volume of 605,000 shares. It is down on news that the company has received a notice of foreclosure on one of its plants and a demand for repayment in full from some debenture holders. It also has an agreement giving it time to seek approval for changes to its debt terms.