Stocks are flat to lower at midday, with the S&P/TSX index down 73 points to 6,652. Earnings fears and reports of weak retail sales are driving the negative sentiment.

Volume is very heavy at 152 million shares, with the selling volume coming in at more than three times the buying. Market breadth is also bearish, with losers outnumbering winners by about five to four.

Every sector is down today, with the heaviest drops coming in the golds, down 2.5%. Industrials are weak, down 1.6%. And, there is some notable selling in materials stocks, financials, techs and consumer products.

Blue chip names, Barrick and Placer Dome, are leading the way down. Both have lost about 3.5% in heavy trading. There are also significant losses in Goldcorp, Cambior, Eldorado Gold and Northgate Exploration.

Nortel Networks is leading the pullback in the tech stocks. It is down 3.3% on more than 15 million shares traded. Although, there is strength in JDS Uniphase and BCE Emergis.

Bombardier is also weighing heavily on the markets, down 6.7% on almost 7 million shares traded.

Other losers include EnCana, Magellan Aerospace, Fairfax Financial and Rogers Wireless.

On the upside, there are gains in CP Ships, Neurochem, Masonite International, Methanex, Cameco, and Nevsun Resources.

The battle for Fording is dragging on with its board telling shareholders not to submit dissident proxies that could deliver control of the company into the hands of Sherritt Coal Partnership II. Sherritt is distributing a dissident proxy circular and proxy forms to shareholders, which it intends to use to vote against Fording’s plan of arrangement with Teck Cominco and Westshore Terminals Income Fund.

In other business news, Mosaic Group is voluntarily initiating a restructuring of its debt obligations and capital structure, and it is seeking bankruptcy protection in both the U.S. and Canada. Mosaic’s board also announced the appointment of a chief restructuring officer. KPMG Inc. will serve as the court-appointed monitor of the firm, and it also intends to engage an investment banking firm to assist in the restructuring process.

Finally, the Superior Propane Income Fund has closed the issue of $250 million of convertible subordinated debentures.

In New York, stocks are lower across the board. The Dow Jones industrial avearage is down 42 points at midday to 8,586. The S&P 500 is down four points to 907. Nasdaq has dropped just two ticks to 1,399.

The small caps continue to go their own way today. The S&P/TSX Venture index is up four points to 1,009. Volume is very heavy there again at 25.4 million shares. Pan Asia Mining Corp. is the day’s top trader, although it is currently halted pending news, having gained 3¢ to 15¢ on 958,000 shares traded.

The Canadian dollar is benefiting from new weakness in the American currency to gain 0.48 cent to US64.53¢.

Dominion Bond Rating Service, Moody’s and Standard & Poor’s have restored the federal government’s AAA credit rating.