Stocks slid this morning despite some strong economic data from Statistics Canada. The S&P/TSX index was down 28 points to 7418 at about noon, even as Canadian GDP for July came in much stronger than expected. An inflation report also suggested that there’s room to cut rates to boost the economy even more.

However, these numbers were dependent on strong U.S. growth and there are signs that this is weakening. Both consumer confidence numbers and the Chicago Purchasing Managers index came in notably weaker than expected, highlighting fears about the strength and durability of the U.S. recovery. Volume is decent at 138 million shares, with the selling outpacing the buying by about 13:11. Market breadth is also weak, with losers outnumbering winners 11:10.

The threat of a weaker U.S. economy is hurting techs, down almost 2%. There is also more modest weakness in consumer stocks, telecoms, industrials and diversifieds. Golds are bouncing back, as are trusts.

Manulife Financial continues to lead the trading, slipping another 0.4% today on heavy volume of 2.8 million shares, as traders continue to digest the impact of its mega-merger with U.S.-based John Hancock Financial Services. The banks are little changed today. However, Kingsway Financial has lost another 2.5%.

Nortel is driving the tech group lower, as traders fret over the U.S. economy. It is down about 2% in robust action, despite news that it has been tapped to bring GSM service to Guatemala. There is also selling in Celestica, Research in Motion, Zarlink Semi, ATI, Telus, CAE, Rogers Communications. BCE is off by almost 1% too.

Old economy stalwarts, such as Alcan, are getting hit by the weak U.S. sentiment, too. Petro Canada, Ipsco, Quebecor and Sears Canada are all down. Air Canada has dropped another 6¢ to $1.10, and Onex is down, too.
Investors are taking refuge in golds, with gains coming to Kinross, Golden Star Resources, Cambior, and Metallic Ventures Gold. There are also gains in Wireless Matrix, QLT, ID Biomedical and Southwestern Resources Co.

In business news, Shaw Communications has been advised that the Shaw family has bought another 300,000 Class B non-voting shares. The family also advised the company it would continue its practice of purchasing shares on a regular basis.

Precision Drilling says that it has combined its oil field rental companies into one entity. Wallbridge Mining reports that it has discovered a high-grade platinum and palladium mineralization on its Wisner property located in the Sudbury basin. The Wisner property is 55% owned by Wallbridge, and 45% belongs to Falconbridge.

Finally, Boralex has successfully closed the acquisition of five hydroelectric power stations in New York for US$8.7 million, it was financed with the corporation’s available cash resources.

In New York, stocks are getting thumped by the economic news. The Dow is down 117 points at midday to 9263. Nasdaq has dropped 30 points to 1794. And, the S&P 500 is 11 points lower at 995. Only the small caps are bucking the selloff. The S&P/TSX Venture index has actually gained seven points to 1390. Volume is a humble 33 million shares, led by ECU Silver Mining, which is up half a penny to 14.5¢ on 1.5 million shares.