U.S. traders came back to work today, and Canadian traders responded by stepping up their own activity. Markets powered higher on the open and have more or less stayed in that positive range.

The S&P/TSX index is 27 points higher at midday to 8774. Volume has revived notably today, so far 155 million shares have changed hands. The buying volume is swamping the selling by a margin of more than three to one. Market breadth is certainly bullish too, as winners outnumber losers 13:10.

The S&P/TSX Venture index looks particularly healthy today too, gaining 24 points to 1925. Volume is robust too at 54 million shares. Oilexco Inc. is leading the way, up 63¢ to $2.80 on more than three million shares.

In New York, merger talk is driving stocks higher. The Dow has gained 67 points to 10694. Nasdaq is 21 point stronger at 2074.

There’s no major economic news out. But what there was — U.S. industrial production numbers – was encouraging. Meanwhile, Bank of Canada governor David Dodge made a speech that suggested it will be sensitive to currency moves in setting monetary policy. Also, the trade is getting a boost from hotter M&A activity in the U.S., chiefly Cingular’s US$41 billion bid for AT&T Wireless.

On Bay Street, miners are leading the way higher, gaining 2%. There is also some real strength in golds, materials and energy stocks. Traders appear to be taking some comfort from governor Dodge’s comments this morning in Mexico. Health care stocks are weaker though, as are consumer staples and industrials.

Alcan is powering higher today, up 1.5%. Bombardier has added 1.8%. Molson is recovering, too. Inco has gained 0.9%, and there are bigger gains in smaller names such as Tahera, Orezone, Corriente Resources, PrimeWest and Nexen. Placer Dome is leading the golds with a 1.5% gain, and Aur Resources is stronger too. But there is weakness in High Point Resources, Niko Resources and Southwestern Resources.

PetroKazakhstan is down 3% on news that a Kazakstan court has ruled that the company violated competition laws. The judgment upheld a decision that distributors had received unjustified revenues totaling approximately US$91 million. The court decision will be appealed, the company notes.

Nortel is back in a familiar position atop the market-cap leader board. It has gained 0.7% on better volume of seven million shares. Sierra Wireless is up about 5%, but BCE is flat.

Financials are modestly stronger today, with Royal Bank and Manulife each up about 0.4%. Scotia is modestly higher too. But the ever-volatile Fairfax Financial has lost 3.3% on the day.

Railways are looking weaker today on news that the members of the Canadian Auto Workers union have rejected three tentative agreements signed by the CAW and CN. A strike is possible by Feb. 20. CN itself is down about 2%, as is CP Rail.

VSM MedTech is leading the health care stocks lower, dropping 5% so far today. And, Angiotech is down 2.3%. However, there is strength in Procyon Biopharma, Ecopia, QLT and Forbes Medi-Tech.

Also, Bennett Enviro and Envoy Communications are both down notably.
In earnings news, Loblaw Companies Ltd. reported that it posted higher earnings of $845 million in 2003. Fourth quarter basic net earnings per common share increased 11.5% to $1.07 from last year’s 96¢. During the fourth quarter, it took a $7-million charge for higher corporate income tax rates in Ontario.

Rogers Wireless Communications reported that its earnings rose to $137 million in 2003.

Glamis Gold posted net income of US$18.0 million for 2003, compared with net income of $13.7 million in 2002. For the fourth quarter of 2003, the company reported net income of $8.7 million, compared with net income $4.7 million in the fourth quarter of the previous year.

Ballard Power Systems said that its net loss for the fourth quarter and fiscal year was $38.8 million and $125.1 million compared with a loss of $35.5 million and $148.4 million for the same periods in 2002.

Lions Gate reported a net loss of $29.8 million for the quarter, compared with a net loss of $2.3 million in the prior year’s quarter.

In other business news, Moore Wallace reports that PricewaterhouseCoopers LLP has completed its independent investigation into allegations of accounting misconduct made in an anonymous letter. PWC has reported that it found no support for the allegations. The PWC report does make recommendations for improved documentation around restructuring charges.