North American markets drifted Thursday morning as investors seemed preoccupied with mixed economic and earnings news.

At midday, Toronto’s S&P/TSX was off 7.72 points or 0.09% to 8450.56, while the TSX venture exchange was down 6.42 points or 0.41% at 1553.92.

In New York, the Dow Jones industrial average fell 4.94 or 0.05% to 1920.31, while the S&P 500 was off 0.5 of a point to 1110.9 Only the Nasdaq composite was in positive territory, up 5.43 points or 0.28% to 1920.31.

The Canadian dollar was climbing back after being down more most of the morning. By noon it was still off 0.09 of a cent to US75.55¢. This was despite some good news about May manufacturing shipments. Statistics Canada said rising industrial prices for some of the country’s resource-based industries led to manufacturers chalking up their sixth consecutive increase in shipments. They climbed 1.1% to $49.1 billion.

The down mood in Toronto was lead by health care sub-sector, which was off 1.45% thanks to the sharp drop in the price of Montreal drug developer ConjuChem Inc. Its shares plunged $4.32 to $5.93 after the company said it is working to deal with the “mild to moderate” nausea and vomiting experienced by patients during clinical trials of its proprietary compound to treat diabetes. It was the most active stock, too, with more than 7.8 million shares trading hands by the midday.

On Wall Street, Mobile phone maker Nokia weighed on technology shares after it warned about profitability in 2004, but positive earnings news from Apple Computer and 3M Co. helped to limit losses in the market.

The key economic news of the morning was a Labor Department report showing that the producer price index fell in June on lower food and energy costs, pointing to tame inflation. Investors are looking for signs that weak inflation will allow the Federal Reserve to raise interest rates at “a measured pace,” thereby limiting the impact on corporate profits.

Investors are eagerly waiting for a government report on Friday on changes in June’s consumer prices. Meanwhile, U.S. crude oil prices neared US$41 a barrel, approaching June’s peaks and stoking concerns that higher fuel prices may threaten the economic recovery and slow profit growth.

Also on the down side, the U.S. Federal Reserve said industrial production registered its biggest drop in more than a year in June. Industrial production fell 0.3% in June following a 0.9% drop in May. Economists had expected production to increase 0.1%.

Overseas, Tokyo’s Nikkei Stock Average of 225 issues added 52.49 points, or 0.5%, to 11,409.14. Hong Kong’s Hang Seng Index rose 6.58 points, or 0.1%, to finish at 11,939.41.

London’s FTSE 100 index slipped 22.2 points at 4,350.4. Frankfurt’s DAX 30 was off 1% while the Paris CAC 40 was 0.74% lower.