A tentative rally Tuesday morning has given way to a modest decline at midday. The S&P/TSX composite index is down 21 points to 6,345.

Volume is average at 94.1 million shares, with sellers ahead of buyers by about 13:5. Market breadth is narrower, but still negative, with losers outnumbering winners by 12:7.

Golds are leading the way down, as the flight to safety eases. The sector is taking an absolute pounding today, down 8.5%. The CBOE gold index is down 9.3%, too.

There are also notable losses in the materials sector and telecoms. Techs are down a bit, as are diversifieds.

Against this, there’s some buying in consumer discretionary names, financials are recovering, and utilities are up a bit.

Barrick and Placer dome are both the subject of some heavy selling today, down 7.3% and 6% respectively. There are also very big drops in the smaller names, TVX Gold is down 15%, Kinross and Echo Bay Mines have each dropped 12%, Bema is down 11%, Goldcorp, Agnico Eagle and Pan American Silver are all down heavily.

Cambior Inc. is escaping the heaviest selling, after it announced that it incurred a net loss of $3.1 million in its latest quarter, compared with a net loss of $10.9 million in the corresponding period of 2001.

There’s also a bit of weakness in blue chip names such as BCE and Suncor Energy. But gold is the real centre of selling today.

Against this, there’s some notable recovery in bank stocks. Royal Bank is up 2.2%, TD has gained 1.5%, and Scotia is up 2.6%, as the banks claw their way back.

Following the banks, there are notable gains in Alcan, Canadian Tire, ATI, EMJ Technologies, Fairmont, Magna International, Saputo, and Canadian Natural Resources.

Bennett Enviro is up more than 10% on news that it has received a letter of intent from the Department of National Defence Canada to clean up contaminated soil along the DEW line. The contract is valued at $29.3 million, and the cleanup will be scheduled over the next two years, to be completed by 2004.

In other business news, BC Gas will not be selling its wholesale waterworks supply business to Emco Ltd. after all. The deal was announced in April. Now BC Gas and Emco say that they have determined that proceeding with this transaction would not be in the best interests of either party and have agreed to terminate the agreement.

Also, CoolBrands International reported that its net earnings for the third quarter were $6.8 million , as compared with net earnings adjusted for the exclusion of good will amortization of $4 million for the same period last year.

In New York, trading has been choppy all day, gyrating from gain to loss, to gain again. At midday, the Dow Jones industrial average is up 67 points to 7,851. The S&P 500 has dropped four points to 816. The Nasdaq composite index is down eight points to 1,274.

The bloodletting in the gold business is also hammering the small caps. The S&P/TSX Venture index is down 28 points to 1,060. Volume is average at about 13 million shares. The top trader is Consolidated Venturex Holdings, which is up 2¢ to 12¢ on almost 1.2 million shares.