Traders are ignoring today’s weak economic news in favour of applauding strong corporate news. At midday, the S&P/TSX composite index has gained 52 points to 8,502.

GDP reports from Canada and the U.S. both came in on the disappointing side. Canada’s soft November report and downward revisions for October, has market watchers calling for a March cut to interest rates rates.

The U.S. fourth quarter report was below expectations, too, but it was still fairly strong, and supportive of no imminent need for rate hikes.

Putting this stuff aside though, traders are piling onto Nortel after its knockout numbers were released after the close yesterday.

Toronto volume is strong at 201 million shares, with buying action about double the selling action. Market breadth is close to even however, reflecting narrow strength to the trade.

The tech group is powering the TSX higher, gaining almost 5% today. Golds are the only other group that’s up as much as 1%.

Energy stocks remain weak today, however, partly due to profit taking. Utilities are weak, too, as are health care names and consumer discretionary stocks.

Nortel is the story of the day, as expected. It has rallied more than 18% on massive volume (even for perennial volume leader Nortel) of 47.5 million shares. The firm blew away analyst expectations on sales and profits for its’ fourth quarter, pushing it back to status as the biggest market cap stock in Canada.

The Nortel story is lending some credibility to the Internet telephony story, boosting names such as Mitec. However, it isn’t doing much for the rest of the tech group, as traders dump other names to focus on the Nortel story.

Celestica continues to take a thumping, as its’ results now look even worse, relative to Nortel. It is down another 3% today.

Golds are recovering today, led by Barrick. Meridian Gold, Agnico Eagle and Rio Narcea Gold are also higher..

Some of yesterday’s beaten up names are also recovering today, as the trade suggests a feeling they may be oversold. Stelco for example, is back up 4.8%. On the flipside of that trade, Stelco’s debt is down 37% in heavy trading.

Energy stocks are the bears’ Nortel today, weighing heavily on the trade. EnCana is down 2.7%, Petro Canada has dropped another 1.2%, and there’s weakness throughout the group, with selling in Suncor Energy, First Calgary, TransAlta, Shell Canada, Peyto Energy Trust and PetroKazahkstan.

PetroKazakhstan said that it has set a $15.6 million exploration budget for the new year. The company estimates that its production for 2004 will represent a 10.7% growth over 2003.

Other losers include Aecon, Canfor, and Vincor.

Financials continue to trade mixed. CIBC is up a bit, but there’s selling in TD Bank, Sun Life and Scotiabank.

In M&A news, Westaim Corporation has sold its Ambeon division and its Neomet Ltd. subsidiary to Sulzer Metco for $35 million.

Alcatel has finalized an agreement to buy Boston-based WaterCove Networks, a specialist in next-generation mobile networking equipment. No price was disclosed.

TransForce Income Fund has completed its’ previously announced acquisition of all the outstanding shares of Transport Georges Lacaille Ltee, a corporation that specializes in truckload activities in Quebec, Ontario and in the U.S.

In other business news, Dynatec Corporation has appointed Philippe Monier as senior vice-president and chief financial officer.

CGI Group has completed a US$192 million private debt placement financing with U.S.-based institutional investors. The private placement consists of three tranches of guaranteed senior unsecured notes, with a weighted average maturity of 6.4 years and a weighted average fixed coupon of 4.97%. The proceeds will be used to reimburse the drawn-down portion of the company’s existing credit facilities, as well as for general corporate purposes.

In the U.S., the trade is a little more subdued. The weaker Q4 GDP report has soured traders a bit, and there is some caution over the possibility of terrorist action at the Super Bowl on the weekend. So far, the Dow Jones industrial average is down 48 points to 10,462. The Nasdaq composite index is flat at 2,069.

The S&P/TSX Venture index is boasting a six point gain to 1,785. Volume is very light at 27.9 million shares. Oilexco Inc. is leading the trade, down 4¢ to $2.76 on volume of 676,000 shares.