Markets are well off their Thursday intra-day lows, but they remain down at midday. The S&P/TSX index has dropped 50 points to 6,468.

Volume remains on the soft side at 76.7 million shares, with selling action outpacing the buying by a margin of about 22:13. Market breadth is decisively negative too, with losers outnumbering winners 23:18.

On a sector basis, the market action looks like a typical flight to safety move. Everything is down, apart from gold stocks.

The industrials are hardest hit, down almost 4%. The volatile techs have dropped 2%, and there is weakness in consumer stocks, financials, health care and diversifieds. Some weak corporate news and weak U.S. economic data has traders doubting the strength of economic recovery.

CN Rail is leading the way down today, dropping almost 8% on strong trading of more than 1.5 million shares. The firm is taking a hit on news that its profit is expected to suffer as the result of a drought in the Prairies, and the consequent drop in grain shipments. CP Rail isn’t far behind, dropping 7.3%.

The banks remain a source of weakness, sliding along with sentiment. Royal Bank is holding its own, but Bank of Nova Scotia is down more than 1% in active trading. CIBC is weaker, too.

Other blue chip losers include Alcan, which is down 2.4%, Bombardier, Suncor Energy, Abitibi and Nova Chemicals. There is also some weakness in CAE, Sears Canada, Celestica, and Open Text.

The golds are going it alone on the upside today. Placer Dome is up better than 2%, joined by strong buying in Kinross, TVX Gold, Cambior, Goldcorp, and Bema Gold.

In New York, the day opened lower, and markets have stayed down amid weak corporate and economic news. That said, the Dow Jones industrial average has pared its losses almost in half, and is now down just 122 points at 8,300. The S&P 500 has dropped 10 points to sit at 883. And, Nasdaq is down 30 ticks to 1,263.

The rotation into golds is enough to boost Canadian small caps today. At midday the S&P/TSX Venture index is up two points to 1,005. Volume remains soft at 10.7 million shares. The day’s top trader is Magnesium Alloy Corp., up 2¢ to 10¢ on 400,000 shares.