Traders are yanking money off the table this morning, on the feeling that the rally may be over done. At midday, the S&P/TSX composite index is off 70 points to sit at 7,906.

The economic news wasn’t too exciting this morning, with capacity utilization staying low, although slightly ahead of expectations. But, profit-taking is really the order of the day. Some negative signals in U.S. corporate news is souring sentiment.

Toronto volume is strong at 174.5 million shares, with selling leading the buying action by a margin of about five to four. Market breadth is also definitely bearish, with losers outnumbering winners by 63:47.

Golds, miners and materials are feeling the brunt of the sell off. Golds are down almost 3.3%, miners have dropped 3%, and materials are 2.3% lower. Financials, energy and health care stocks are weak, too.

There are no sector gains, just small losses in areas such as real estate and consumer staples. Although, a few energy trusts are rallying.

Traders feeling that golds have run up too far, too fast, are taking to stocks down. Kinross is down 3.7%, Placer Dome is off 2.3%. Barrick and Eldorado Gold are holding up better, losing just 0.5%. There is more compelling weakness in Golden Star Resources, down 9%, Bema Gold is off 5.6%, and there is strong selling in Cambior, Queenstake and Ivanhoe Mines.

The rest of the resources aren’t doing much better. Inco has lost almost 3%, Falconbridge is 5.6% lower, Alcan is down 1.8%, and there is selling in EnCana, Talisman Energy, Penn West Petroleum.

There’s no fun being had in the forestry sector, either, with Tembec saying that it intends to fight the proposed Canada-U.S. agreement on softwood lumber and calls the deal “totally unacceptable.”

Abitibi-Consolidated announced that it is indefinitely idling two paper mills, as of Dec. 14. These actions with improved operating efficiencies will reduce annual operating costs by at least $125 million, it says. The company will begin 2004 with more than one million tonnes of focused downtime. Despite these announcements, the company anticipates selling as much, if not more, product in 2004 than in 2003.

Financial stocks are also struggling today, with Sun Life Financial down 1% on reports that its U.S. fund arm, MFS, is being targeted by the New York state attorney general, Eliot Spitzer.

Elsewhere in the group, there is strong selling in CIBC, down 1.4%, Royal Bank has dropped 1.3%, Bank of Montreal is 1.1% lower, and Scotia and TD Bank are down less than 1%.

The top tech name, Nortel, is joining the selloff, down 1.1% in average volume. BCE is lower, as is Mitec. However, Zarlink Semi is up notably. QLT is leading the biotechs down, dropping 5.3%. And, Air Canada is down, too.

On the upside, there are decent gains in Bombardier, Ivanhoe Energy, Tesco, Southwestern Resources, Labopharm, Luke Energy and Peyto Energy Trust.

In business news, Vermilion Energy Trust has closed the issue of 6.05 million trust units for gross proceeds of approximately $85 million. The trust units were offered to the public on a bought-deal basis through a syndicate of underwriters led by CIBC World Markets and included BMO Nesbitt Burns, RBC Dominion Securities, TD Securities, National Bank Financial, Canaccord Capital, Scotia Capital and FirstEnergy Capital.

Hudson’s Bay has closed its previously announced offering of $120 million unsecured medium-term notes. The underwriting syndicate for the issue was led by Scotia Capital Inc., and included CIBC World Markets Inc., RBC Capital Markets, BMO Nesbitt Burns Inc., National Bank Financial Inc., TD Securities Inc. and HSBC Securities (Canada) Inc.

Richmont Mines has acquired several properties from McWatters Mining Inc. for a cash consideration paid on closing of $7 million.

Hawker Resources has entered into a definitive agreement to acquire all of the shares of Pointwest Energy Inc. for an overall purchase price of approximately $88 million, inclusive of debt.

FNX Mining Co. and Dynatec Corp have exercised the option to a purchase agreement with Inco, allowing them to acquire a 100% interest in the mineral rights on several properties.

Micrologix Biotech reported that its loss for the last quarter was $3.5 million, compared with a loss of $2.5 million for the same period last year and a loss of $3 million for the preceding quarter.

In New York, the outlook is not nearly so gloomy. The indexes have been gyrating lazily all morning. At midday, the Dow Jones industrial average is up 17 points to 9,940. The Nasdaq composite index is off one point higher at 1,906. The S&P 500 is up a quarter point at 1,060.