Traders have shrugged off a pair of encouraging U.S. economic reports issued this morning. Initial jobless claims fell much more than expected, and productivity delivered a huge gain in the third quarter. However, economy watchers are looking ahead to tomorrow’s Canada and U.S. jobs reports.

This leaves the S&P/TSX composite index down two points to 7,866. Volume remains decent at 149 million shares, with the selling volume ahead of the buying by a margin of 38:29. Market breadth is modestly bearish too, as losers outnumber winners 53:50.

On a sector basis, there is weakness in miners, golds and consumer stocks. Techs and real estate are both notably stronger, as are health care stocks.

Nortel is leading the tech group higher, gaining 2.4% in average volume, after Cisco Systems reported strong profits. Tundra Semi, Certicom, Cryptologic and Telesystem International Wireless are all joining it for a rally.

Real estate stock are making gains following news that Trizec Properties reported net income totaled $58.8 million, compared with a net loss of $254.5 million for the third quarter of 2002. Last year’s net loss reflected writedowns on Trizec’s investments in two retail and entertainment properties and Sears Tower. This quarter’s net income was positively impacted by the settlement of claims related to the Desert Passage property, plus a total net gain related to asset and investment sales.

This is boosting real estate stocks and REITs generally. Boardwalk Equity is a big winner, up more than 12%.

Financial stocks remain active traders, with a mixed session for banks. Royal Bank and Bank of Montreal are up .7% and 1.2%, respectively. But there is selling in CIBC, Scotiabank and TD Bank.

TD is down most, dropping more than 1% on reports that it may not be so close to a discount brokerage purchase in the U.S. after all.

CI also remains a hot story, up just 0.2% in heavy trading of 2.6 million shares on speculation over whether it will convert to an income trust.

There is general weakness in rocks and oil stocks today. Ivanhoe Mines has dropped 8%, Ivanhoe Energy is down about 7%, and there is notable selling in Suncor Energy, American Mineral Fields, Nevsun Resources, Kinross Gold, First Calgary Petroleums, Bolivar Gold and Tahera. Bennett Enviro is very weak, too.

Wheaton River has dropped 5% on news that it is buying EBX Gold Ltd., the owner of the Amapari gold project in Brazil, for approximately US$105 million.

Against this, there is some strength in blue chip resource firms such as Barrick Gold and EnCana. There is also strength in CN Rail, TransGlobe Energy, Minco Mining and Transat AT.

In earnings news, Brascan reported that its net income increased to $100 million, compared with $58 million in the third quarter last year.

Four Seasons Hotels says that it realized net earnings of $4.7 million, as compared with a net loss of $12.3 million for the third quarter of 2002.

Third quarter 2003 basic net earnings per common share for Loblaw Companies increased 16.2% to 79¢ from the 68¢ earned in 2002. Sales increased 6.9% to $7.7 billion.

Devon Energy Corporation recorded net earnings for the quarter of $412 million. In the third quarter of 2002, Devon earned $62 million.

Procyon Biopharma said that it incurred a net loss of $2,772,512 for the third quarter of 2003, compared with a net loss of $1,480,239 for the same quarter last year.

Hydrogenics said its net loss for the third quarter 2003 was $6.6 million, compared with a net loss of $7.0 million for the third quarter 2002. Net loss for the year-to-date 2003 was $14.4 million, compared with a net loss of $15.5 million for the comparable period in 2002.

For the quarter, Breakwater Resources posted an unaudited consolidated net loss of $4.1 million, compared with a net loss of $16.9 million for the same period in 2002. The main reasons for the improvement were stronger metal prices, lower treatment and marketing costs, and a lower non-cash foreign exchange loss on the U.S. dollar denominated debt.

Sleeman Breweries reported that its net income in the third quarter increased 17% to $4.4 million, compared with $3.7 million in the third quarter of 2002. The current quarter’s results include the effect of the one-time management change costs and the write-off of deferred financing fees, which reduced net income for the quarter by $300,000.