Stocks are going nowhere Thursday. At midday, the S&P/TSX index is flat, up just three points to 6,563.

Volume is a bit better today at 91.1 million shares, with the buying well ahead of the selling by about 19:7. Market breadth is also bullish, with winners outnumbering losers by almost five to four.

While the market internals are decidedly positive, there’s just not a lot of price action coming out of it. Diversifieds are the only TSX group up as much as 1%.

There are small gains in most other sectors, but there is some weakness in consumer discretionary stocks, following a surprisingly weak December retail sales report. The heavyweight financial group is also down a bit.

The M&A activity in the financial group continues to drive the trade. Canada Life is up 0.9% in active trading, while Manulife Financial is down 0.5%. Fairfax Financial is down again today.

In corporate news, EnCana has gained 1.4% on news that it earned pro forma $1.25 billion in 2002. Daily pro forma oil and gas sales exceeded the midpoint of the company’s 2002 target range, driving the results.

Biovail is up 3% on news that the U.S. Food and Drug Administration has approved its hypertension treatment. Biovail will begin shipping and start promotion for the drug in early March.

The other big story stock is Emco, up 11.7% in active trading, on news that the catchily-named, 2022841 Ontario Inc., will make an offer to acquire all of its outstanding shares at $16.60 per share. 2022841 Ontario is an indirect subsidiary of Blackfriars Corp., a Delaware corporation.

The offer will be unveiled shortly and will be subject to a minimum tender of 66% of the outstanding shares and regulatory approvals. The board of directors of Emco will be supporting the offer and Masco Corp., the holder of approximately 42% of Emco, will tender its shares to the offer.

Other gainers today include Quebecor World, Inco, Southwestern Resources, Norske Skog, and Shawcor.

There is weakness in Nortel, down 1.4% in relatively light trading. Ballard Power is weaker, as is Magna International, Agrium, Sobeys and Dorel Industries.

The golds are split today, with Barrick ad Agnico Eagle gaining ground. But Placer Dome is down 2.7%.

In other earnings news, Mosaid Technologies reported that its net loss for the third quarter was $2,703,000, compared with a net loss of $4,545,000 a year ago.

AEterna recorded a net loss of $8 million in the fourth quarter, compared with a net loss of $2.8 million for the same period last year. This increased loss is mainly due to future income tax recovery recorded during the last quarter of 2001. Net loss for the current year was $25.8 million, in comparison with $3.5 million in 2001.

The S&P/TSX Venture is also holding up, gaining two points to 1,097. Volume is improved there too, coming in at 22.4 million shares. The top trader for the day is Pethealth, which has dropped 2¢ to 13¢ on almost 4.1 million shares.

In the U.S., markets have not been nearly so sanguine. Some negative economic data, namely a ballooning trade deficit and higher than expected producer inflation numbers, has been weighing on the market.

The Dow Jones industrial average is down 66 points at midday to 7,935. The S&P 500 is down four ticks to 841. The tech-heavy Nasdaq is flat at 1,334.