Toronto stocks are mixed after the Bank of Canada met expectations by cutting interest rates another 25 basis points. At midday, the S&P/TSX composite index is down three points to 8,872.

Today’s rate cut was largely expected, but the central bank also provided some fuel for the market by suggesting that future cuts could come if necessary.

There was no notable economic data out in the U.S.

Toronto volume is weak at just 125.2 million shares, with buying ahead of selling by a margin of 31:22. Market breadth is modestly bullish, as winners outnumber losers by a six to five margin.

The weakness today is centered on the golds, with profit-taking trimming the sector by 2%. There aren’t any other big slides, although the miners and materials are coming off recent highs. Consumer stocks are mixed, with the staples seeing some buying and the discretionary names in a slump.

Health care stocks are the strongest area, and energy names are continuing to see some gains.

The banks are trading pretty actively today, led by a 0.5% slide in Royal Bank, as it continues to be punished for its disappointing U.S. results. Bank of Nova Scotia is up 0.4% on news of its latest results, however. Scotia’s record earnings trend continued in the first quarter of 2004 with net income of $704 million, an increase of $109 million, or 18.4%, over the same period last year. It also declared a two-for-one stock dividend.

Elsewhere in the banking group, TD is seeing a small gain, as is CIBC. Bank of Montreal has dropped 1%. National Bank announced a $368 million outsourcing deal with INTRIA. It will supply cheque, bill payment, and currency processing over 10 years.

Also, Canadian Western Bank and HSBC Bank Canada have signed a letter of intent for Canadian Western Bank to acquire all of the shares of HSBC Canadian Direct Insurance Incorporated for $25.4 million in cash.

Energy stocks are also active. Suncor Energy is leading the way, up 1.1% in strong volume, Talisman Energy and Canadian Natural Resources are higher, too. EnCana is down 0.5%, and Petro Canada is slightly higher.

Penn West has dropped 0.3% after reporting record net income of $435 million for 2003, up from $158 million in 2002. Fourth quarter 2003 net income was $34 million, compared with net income of $62 million in the fourth quarter of 2002. It also indicated that it may convert to an income trust.

Golds and other miners are largely backing off their recent gains, with Barrick dropping 1.1%. Noranda is down 1%, and there is selling in Agnico Eagle, Lionore Mining, and Goldcorp. Jaguar Nickel is higher however, and Alcan continues to make gains.

The tech group is also mixed, with Nortel trading flat is light trading. Research in Motion is down about 1%. Creo and Cinram are both down, but Cedara Software is higher at midday.

Molson is sliding 1.2% in heavy trading on word that rival, Interbrew, may be entering the Brazilian market.

The Forzani Group is down 16% after releasing unaudited results for the fourth quarter and fiscal year. It says that net earnings for the quarter will be between 46¢ and 48¢ per share versus 43¢ per share in the prior year. The company has revised its earnings guidance for the year to between 85¢ and 87¢ per share. The company’s prior guidance was $1.01 to $1.05 per share.

There is also selling in Thomson and Sino-Forest.

On the upside, Biomira is up strongly, although there’s no news on the stock. Bioscrypt is up 20% on word that the Bank of China is deploying Bioscrypt’s V-Pass fingerprint reader in approximately 1,000 branches. And, there are gains in Aeterna Labs, TLC and Cipher Pharma.

Nu-Gro has gained 17.6% on news that it is being acquired by United Industries Corp. for approximately $192 million in cash.

In business news, Precision Drilling issued a news release indicating that, contrary to news reports, its Polar Completions’ business is a profitable, viable business. However, accounting rules require it to classify the business as “discontinued”, because it is up for sale.

Hollinger has been advised that Press Acquisition Inc. has withdrawn its offers to acquire the firm. Press, Ravelston and Conrad Black have mutually agreed to terminate the support agreement.