Despite today’s generally good economic news, or perhaps because of it, stocks are down a bit. There’s also plenty of earnings news driving the trade. At midday, the S&P/TSX composite index is off 22 points at 8,595.

Canadian retail sales data came in very strong today, rising 2.3% in February over January. However, wholesales were unexpectedly weak.

Nevertheless, economists say that the retail sales report bodes well for the February report on real GDP, due to be released on Friday.

In the U.S., existing home sales were reported on the strong side. As well, April’s Conference Board’s consumer confidence index increased to 92.9 from 88.5.

In Toronto, TSX volume is with just 112.5 million shares traded. The selling volume is outpacing the buying by a margin of about five to four. Market breadth is similarly negative, as losers outdo winners by a six to five margin.

The weakness is coming in techs, miners, health care stocks and REITs. For the most part, yesterday’s winners are being hit with some profit-taking. The upside is quite weak, with only energy stocks seeing any convincing buying.

Petro Canada is the leader on the upside, gaining 2.5% on strong volume. It reported first quarter earnings of $517 million, compared with $485 million on the same basis for the first quarter of 2003. First quarter net earnings in 2004, including gains or losses on foreign currency translation and on disposal of assets, were $513 million, compared with $579 million in the same period of 2003.

Following PetroCan, there is buying in energy names such as EnCana, Suncor, Ensign Resources, Precision Drilling and Cequel Energy.

However, weaker earnings have CP Rail down. It recorded a decline in net income to $24 million, from $102 million in the same period of 2003. The railway said the $78-million decrease in net income was due to a net loss of $14-million in foreign exchange on long-term debt in the first quarter of 2004, compared with a net gain of $64-million in the same period a year earlier.

As well, there is selling in resource names such as Inco, Barrick Gold, and First Calgary Petroleum. Other blue chip losers include Manulife, BCE and Loblaws. The weakness in Manulife is met by mixed action in the banks. Scotia is down sharply, but there is buying in TD Bank. CIBC is flat.

Other losers include Intertape Polymer, Sierra Wireless, Aeterna, ConjuChem, Rogers, QLT and Research in Motion. RIM is leading the techs lower, as Nortel is unchanged at midday.

QLT has dropped almost 3% on news that first quarter net income came in at US$24 million. Also, it is narrowing its Visudyne sales range from $420 million to $455 million, to a new range of $430 million to $455 million, which represents top-line growth of 20% to 27% over 2003. The company has also updated earnings per share guidance for 2004 to 81¢ to 91¢.

On the upside, the ever-volatile Air Canada has jumped almost 12% on the latest efforts to find it an angel.

Bioscrypt has gained almost 8% on news that the East Line Group will be installing Bioscrypt’s V-Smart readers at the largest airport in Russia, Domodedovo International Airport.

Thomson is up 3% on news that it earned US$37 million in its first quarter.

In other earnings news, Fording Canadian Coal Trust said its net income for the first quarter of 2004 was $11 million compared with $147 million during the first quarter of 2003, which included significant, one-time gains.

Maax said its operating income for the fourth quarter of fiscal 2004 amounted to $19.7 million, as opposed to $22.4 million for the equivalent period of fiscal 2003, because of the lower sales in the bathroom and kitchen sector, and the losses in the spa sector.

TSX Group reported that its net income was $25.8 million for the first quarter of 2004 representing an increase of 80% over $14.4 million for the first quarter of 2003.

In other news, Alcan said that it has increased the estimate of synergies from the integration of Pechiney to US$360 million, up substantially from the initial US$250 million target. The company expects to reach the full synergy run rate by year-end 2005.

Fairmont Hotels & Resorts Inc. has advised the Legacy Hotels REIT that it may, subject to favourable market conditions, reduce its Legacy investment during 2004. FHR is Legacy’s largest unitholder with an approximate 35% equity interest in the trust. Also, FHR reported that it lost US$600,000 in the first quarter.