Stocks are mixed as Canadian traders mull over a disappointing August GDP report. Although economists had forecast a decline due to the big blackout, the drop was worse than expected.

At midday, the S&P/TSX index is up just 10 points to 7,750. Volume remains robust at 146 million shares, with buying ahead of the selling by a margin of 10 to seven. Market breadth is also bullish, as winners outnumber losers 28:25.

On a sector basis, there is strength in gold stocks, miners, and materials. Income trusts continue to slump a bit, and there is weakness in technology shares, too.

The financial stocks are driving the trade volume today, but they aren’t making much of a move either way. Royal Bank is down, dropping 1.6% in heavy trading of 1.6 million shares, and CIBC is down about the same amount.

However, TD Bank is up almost 1%., while Manulife has gained 2.8% on news that the TSX has accepted its proposed stock buy-back. Investors Group has gained 0.7% in unusually heavy trading of 883,000 shares, after releasing stronger Q3 earnings yesterday.

Techs and telecoms are getting some attention today. Telus is in the news with a third quarter profit of $115.9 million. On a per share basis it earned 32¢ in the quarter, compared with a 35¢ loss for the quarter a year ago. The stock is stagnant on the news.

BCE and Nortel are both lower, and there is weakness in Zarlink Semi, CAE and Bakbone Software.

EnCana is rebounding a bit today, up 0.8%. Inco has gained another 1.8%, and Allstream is up strongly, too.

There is lots of buying in the gold stocks, with big gains coming in Bolivar Gold, Northern Orion, Queenstake Resources, Meridian Gold, and Wolfden Resources. Southwestern Resources has gained almost 11% after revealing some popular assay results from a mine in Peru.

Diamond miner Tahera is up about 6% in heavy trading on news that it has agreed to a bought deal with a syndicate of underwriters led by Griffiths McBurney & Partners, and including Dundee Securities Corp. and Paradigm Capital Inc. Tahera intends to use the net proceeds from the $8 million private placement to finance exploration and development.

The news is not so good for Eldorado Gold, which has dropped 4% on news that it is buying 2.5 million units of Fury Explorations to give it a 31% stake in the firm.

In M&A news, Tembec and Weyerhaeuser have reached an agreement in principle that will see Tembec buy Weyerhaeuser’s sawmill assets in Chapleau, Ont., for $25.5 million. The transaction is expected to close in the fourth quarter.

In New York, markets are also trending modestly higher on some encouraging secondary economic data. At midday, the Dow Jones industrial average is 33 points higher at 9,819. The tech-heavy Nasdaq composite index has gained three ticks to 1,936. The broader S&P 500 is also up three points to 1,050.

The S&P/TSX Venture index is more or less unchanged, up just a point to 1,552. Volume remains strong however at 54.3 million shares. Donnner Minerals is leading the trade, sliding 6.5¢ to 15¢ on 2.1 million shares.