Stocks are weaker Tuesday, as war worries grab traders’ attention once again. The S&P/TSX index is down 46 points at midday to 6,547.

Volume is improved, with 111.2 million shares changing hands. The buying volume is edging the selling by about 14:13. Market breadth is very negative however, as losers outnumber winners by about eight to five.

The trade today is all about safety. Golds are up 4% as traders pile into those stocks ahead of U.S. Secretary of State Colin Powell’s scheduled appearance before the U.N. Security Council tomorrow. Powell is expected to lay out the case for a U.S. attack on Iraq.

Also, tension between the U.S. and North Korea is ratcheting up the anxiety, allowing traders to ignore some stronger economic data in the U.S.

With golds up impressively, everything else is getting dumped. Tech stocks are leading the way lower, down 2.6%. Telcoms, financials, industrials and diversified names are also down notably.

Placer Dome is driving gold stocks higher, gaining 3.6% on 3 million shares. Barrick isn’t far behind, adding 3% on 1.4 million shares traded.

As usually happens in these sorts of trades, the small cap names are enjoying much bigger percentage gains. Kinross is the top mover, adding 11%. It is followed by the usual cast, including Thistle Mining, Nevsun Resources, McWatters, Glamis Gold, Eldorado Gold, Goldcorp, Wheaton River and Gold Star Resources.

Apart from anything with gold in the name, there are a few odd winners. One of them is Manulife Financial, up 1% in strong trading on news that it has posted record net income of almost $1.4 billion for 2002,up 19% over 2001. Return on shareholders’ equity for the year was 16.2%.

Manulife said the record results were driven by good business growth, excellent expense management and favourable claims experience in several businesses. Fourth quarter net income of $372 million was also a record, 11% higher than the same period in 2001.

Much of the rest of the market is down, as traders recoil from speculating on stocks generally. Nortel is leading the tech group down, with a 5.7% drop on volume of 13.5 million shares. GSI Lumonics is weaker too.

The banks are lower with CIBC down 1.6%, Royal Bank off 1.2%, and Scotia off just 0.6%. Elsewhere in the financial services group, Fairfax has dropped almost 8%.

Other losers include EnCana, Canadian Oil Sands, Teck, and Inco, Moore Corp., Pangeo Pharma and Fairmont Hotels.

In market news, Shell Canada plans to buyback a maximum of 2% of its common shares. Repurchase of the common shares will be carried out through the facilities of the TSX.

In other earnings news, Camco has posted net income of $6.1 million for the fourth quarter. This compares with a net loss of $500,000 for the same period last year. For the year, the company posted net income of $11.1 million, compared with a net loss of $4 million last year.

The small cap S&P/TSX Venture index is bucking the trend, gaining eight ticks to 1,126. Volume is quite strong there at 28 million shares. Stornoway Ventures Ltd. is the day’s top trader, dropping 16¢ to 90¢ on more than 2 million shares traded.

In New York, stocks are notably lower on war tensions. The Dow Jones is down 153 points to 7,957, but off its lowest intra-day levels. The S&P 500 has dropped 18 points to 842. The tech-heavy Nasdaq composite index is taking it hardest, down 28 points, more than 2%, to 1,296.