Toronto stocks are making modest gains amid some meaningful economic data on both sides of the border. At midday, the S&P/TSX composite index is up by 21 points to 8,401.

Canada’s trade surplus for November was reported lower than expected, highlighting the impact of the stronger dollar on exports. The data could spark an interest rate cut next week.

Conversely, the U.S. trade deficit fell more than expected, partly due to its depreciating currency. As well, U.S. producer price inflation was reported as moderate, allowing the U.S. central bank to hold off of rate hikes for some time.

Toronto volume is simply massive with 250 million shares crossing the floor today, with buying ahead of the selling by a ratio of 27:22. Market breadth is close to even though, with losers edging winners 57:56.

On a sector basis, there’s strength in energy and financials once again. Industrials and utilities are making gains, too.

Golds are weighing on the market though, with those stocks sliding 2.7% so far today. Miners and materials are also weaker.

Much of the volume in the market today is coming in a handful of stocks. Yellow Pages Income Fund, which recently had a huge public offering, is up 1.3% with an incredible 62.6 million shares changing hands.

Also, Nortel continues to trade in massive volumes, today it is down 1.7% on 25.4 million shares.

Penny stock, Northern Financial, is up just a penny on 20.6 million shares.

Apart from these unusually huge trades, there is also strong volume in many of the market’s other big names. Placer Dome for example, is down 4.3% with almost three million shares traded.

Many of the golds are losing ground today, as traders look for bargains in other sectors. Barrick is 2% lower in active trading, Kinross has dropped 3%, and there is selling in Rio Narcea, Eldorado Gold, Wheaton River, Northern Orion Resources and Golden Star Resources.

Agnico-Eagle Mines reported that it produced 70,299 ounces in the fourth quarter, within the previously disclosed target range.

Cambior said that in 2003 it produced 521,500 ounces of gold, in line with its budget. This compares with production of 568,800 ounces of gold in 2002. For the fourth quarter of 2003, gold production totaled 143,100 ounces. Louis Gignac, Cambior’s president and chief executive officer, stated it expects a record year of production in 2004, with gold output targeted at 705,000 ounces.

Talk of a deal between TD’s Waterhouse subsidiary and E*Trade continues to attract attention. TD is up 0.6% on 1.1 million shares traded. Elsewhere in the group, Bank of Montreal is up 1.1%, Royal Bank has added 0.7%, Sun Life is 2% higher, and Manulife is up 1.1%.

Kingsway Financial is down 5% on news that it has consolidated the reporting structures of both its U.S. and Canadian operations through the Toronto-based holding company.

Apart from the financials, many of the other blue chips are making gains today, led by a 2% jump in Petro Canada. EnCana, First Calgary Petroleums and Canadian Natural Resources are higher, too. Inco is up 1.3%, and BCE is also making gains.

Air Canada is shaking off the news that rival WestJet is planning to triple the number of flights it runs from Toronto’s international airport.

Yesterday’s big dealmaker, Dorel, is down 1.4% today.

In business news, Talisman Energy said it plans to spend a record $2.35 billion on exploration and development in 2004, and has reconfirmed its annual production growth expectations of 5% to 10% per share through 2006.

On the M&A front, Jefferson-Pilot Corp. has agreed to purchase the U.S. group business of Great-West Lifeco’s indirect subsidiary, Canada Life. The transaction is expected to close during the first quarter of 2004, subject to regulatory approvals. The Canada Life U.S. group business is operated from Atlanta, and consists of group life, disability and dental insurance. The business represents approximately US$340 million in annual premium.

CGI Group has acquired certain assets of GDS & Associates Systems Ltd. representing $6-million in annual revenue. Through this acquisition, CGI obtains a presence in Victoria, B.C. and it expands in Regina and Edmonton. As part of this acquisition, 61 senior-level professionals located in Victoria, Regina and Edmonton will join CGI.

Imperial Equities has sold the Century Vallen building to Standard Life for $5.35 million, completing the sale of the company’s largest single transaction to date.