The bears are having their way with markets Wednesday, following the release of some weak economic data on both sides of the border, along with soft corporate earnings. The S&P/TSX composite index is down 34 points at midday to 7,082.

The one comforting sign is that volume is relatively light at 95 million shares, with the selling ahead of the buying by about nine to five. Market breadth is also negative, as losers lead winners 27:19.

Excepting a modest gain in the industrial group, every sector on the TSX is down. Techs are certainly the weakest group, dropping 2.5% on some profit worries. Golds are down 1.3%. Everything else is down, but only modestly so.

Weak inflation and production numbers in the U.S. are throwing some doubt on its recovery. Canadian manufacturing numbers were also, which is also hitting recovery sentiment.

Nortel is leading the way down, dropping 3% on decent volume of 10.5 million shares. Profit concerns are dogging the stock after rival Lucent Technologies saw its revenues weaker than expected.

Actual weak profits are also hitting chipmaker, Zarlink Semiconductor. Its stock is down 8.6% in heavy trading on news that it recorded a first quarter net loss of US$8.7 million, down from a US$6.2 million loss in the same period last year.

This is negative news is spilling over, taking down stocks such as Research in Motion, Celestica, and Sierra Wireless.

The financials are modestly weaker today, with Royal Bank and CIBC both down, overcoming some strength in Sun Life. Investors are applauding CI Fund Management’s Q4 results released yesterday. The stock is 2% so far.

Bema Gold is leading the gold group lower, dropping almost 3%. Wheaton River and Agnico Eagle are both off, too.

Energy stocks are a bit softer, led by a 0.7% slide in EnCana. TransCanada and Canadian Superior Energy are weaker, too.

On the upside, takeover player Alcan is up 2.1% in strong trading, on the expectation that it will win its bid for Pechiney.

There is also strength in assorted names such as Bombardier, Sears Canada, Hawker Resources and SFK Pulp Fund.

In New York, the weak economics and some weak corporate news are conspiring to take stocks lower. The Dow Jones industrial average is down 63 points to 9,066. The S&P 500 has dropped nine ticks to 991. The Nasdaq composite index is holding up a bit better, but it is still down 12 points at 1,741.

The S&P/TSX Venture index is also down six points to 1,111. Volume remains weak there too, with just 14.4 million shares changing hands. Isee3D is the day’s big mover, up 3.5¢ to 6¢ on 542,000 shares.