Markets are rallying strongly at midday, as traders shake off some of their rate hikes worries, and focus on today’s strong earnings reports. The S&P/TSX composite index is up 61 points to 8,634.

Volume is on the light side at 123.2 million shares, with buying swamping the selling by an eight to three margin. Market breadth is very bullish too, with winners outnumbering losers by about 23:15.

The beaten up names of the past couple of days are now enjoying lots of bargain hunting action. Miners are up 2.4% as a result.

There is also strength in health care stocks, golds, materials, REITs, energy and consumer discretionary names. Only consumer staples and utilities are down, and only down a little.

The resource stocks that have been hammered in recent days are bouncing back today. Alcan is leading the way, up 2.4%, and there is similar strength in many blue chip names including Inco, EnCana, PetroCanada, Teck, Esprit Exploration, PlacerDome, Rio Narcea and Barrick.

Barrick reported first quarter net earnings of $26 million, after a $10-million after-tax non-hedge derivative loss.

The blue chip gold producer was joined by a slew of earnings announcements. Canadian National Railway reported first quarter net income of $210 million.

Potash Corp of Saskatchewan saw its earnings grow to US$50.7 million. It is up 4.8% on the news.

Nexfor has posted its third consecutive record quarterly earnings due to the strong performance of its panel board business. The company today reported profits of $81 million for the quarter, compared with $1 million in the same period last year.

TransAlta released net earnings for first quarter 2004 of $47.2 million, compared with 2003 first quarter net earnings of $48.7 million. First quarter earnings included lower operating, maintenance and administration expenses offset by lower prices and higher interest and depreciation.

The Jean Coutu Group posted net earnings of $48.5 million, an increase of 14.3% over the net earnings of $42.4 million for the same period last year.

Astral Media said that its net earnings from continuing operations in the second quarter of fiscal 2004 increased by 16% to $17.4 million.

Nortel Networks is up another 1.2% in solid trading. There is also strength in CanWest Global and Call-Net. Biotechs are heading higher led by new TSX entrant TM Biosciences. It is up 17.5% on news of a new product launch. Aeterna Labs has gained 7% on word that it has started a new study. And, TLC Vision is higher too.

Financial stocks are mixed, and mostly just making small moves. Manulife is the big mover, up 1.6% in active volume. CIBC is leading the banks higher with a 0.6% gain, but this is matched by the decline in TD Bank. Scotia is up a little, but RBC is down.

The real winner in the group though is Home Capital. It is up 7.7% on news that it has now achieved 35 consecutive quarter-over-quarter increases in earnings. Net earnings increased 66.5% to $10.0 million for its latest quarter.

Some of yesterday’s winners are getting hit by profit taking. For example, Ivanhoe Energy is down 7.7%, after a big gain yesterday. There is also selling in recent winners such as Cott, Sierra Wireless, and NA Palladium. Other losers include Winpak, Vincor and Corus.

Goldcorp is down 4% on news that it earned US$17.3 million in its first quarter.

In other business news, Intrawest reports that it has combined all of its travel and leisure businesses into the newly formed leisure and travel group. This new group includes Intrawest’s mountain and warm-weather resorts, its golf, lodging and central reservations businesses, and Club Intrawest. This group of businesses generated $650 million in revenues in fiscal 2003.

In New York, strong earnings reports and easing rate fears has the Dow Jones industrial average up 115 points at midday to 10432. The tech-heavy Nasdaq composite index has raced ahead 27 points to 2,022.

The S&P/TSX Venture index is modestly higher, adding just two points to sit at 1,739. Volume is solid at 35.2 million shares. Divcom Technologies Inc. is the day’s top trader, up 10¢ to $1.10 on more than three million shares traded.