Markets are weak today, as traders have failed to respond to potentially positive economic news in the United States.

The more skeptical among them seem to be bracing for all out trade war between the U.S. and Europe if the European Union kills the proposed US$45 billion takeover of Honeywell International Inc. by General Electric Co.

At midday, the TSE 300 is down 61 points to 7,952. Volume is about average at 73 million shares.

Down volume holds a slight edge on up volume, but market breadth is more negative. Losers are outnumbering winners better than five to four.

Safety is the name of the game today. Only the gold and real estate sub-indices are up. Everything else is down.

General pessimism is taking out most sectors. Paper stocks are down, mines are weak, as are financials, conglomerates and consumer stocks.

Gulf Canada and Nortel Networks are running neck in neck on the volume charts, both trading about 5.4 million shares. Neither stock is moving much more than a penny in either direction. Nortel is at least coming off earlier lows.

There is some weakness in techs. Celestica is down in active trading, as is Research in Motion. Other tech losers include Pivotal, Sierra Wireless, Microcell, Siebel, MDS and Leitch Technologies.

The banks are leading the financials down, with economic gloom hitting CIBC, Bank of Montreal and Bank of Nova Scotia hardest. The insurers aren’t far behind on the slide. Assante is about the only financial stock with something to cheer about today. It’s up about 7%.

Other big losers today include Canadian Pacific, Alcan. Calpine and Maverick Tube. Talisman Energy is down too, on news that it may get kicked off the NYSE for operating in the Sudan, a nation that has been declared off limits by the U.S.

Today’s winners make a motley collection. Golds such as Placer Dome and Meridian Gold are up, as are Stackpole, Transat, Cott, World Heart and Co-Steel.

In New York, weak earnings, uncertain economics and the GE-EU squabble are all depressing stocks. At midday, the Dow Jones industrial average is down 132 points to 10,740. The Nasdaq composite index is off 45 points to 2,077. The S&P 500 has lost 13 points to 1,229.

The CDNX is down today, off 10 points to 3,329. Volume is a little light at 16.4 million shares. Techs are leading the way lower, wiping out gains in miners and oils. TransPacific Resources Inc. is the top trader, flat at 2¢ per share with 1.4 million shares crossing the tape.