Toronto stocks are modestly higher Tuesday as traders await the U.S. Federal Reserve’s decision on interest rates later this afternoon. The S&P/TSX composite index is 24 points at 7,342.

Toronto volume is decent at 115.2 million shares, with buying ahead of the selling by a 33:20 margin. Market breadth is narrower, but still bullish, with winners outpacing losers 25:23.

On a sector basis, there is notable strength in the health care space, up more than 2%. There are also gains in techs, financials and industrials. On the downside, golds are pulling back a bit, and materials are sliding, too.

Nortel is powering the techs higher, up 2.7% in heavy trading of 13.1 million shares. It seems to be gaining on the expectation that the Fed is going to engineer a worldwide recovery.

This is also boosting some blue chips, such as BCE, which is up 1%. CP Rail and CN Rail are recovering, and there are gains in names such as Creo, Open Text, Mega Bloks and Sterling Centrecorp.

Financials are also up on faith in the Fed. CIBC is leading the way, up 1.3%. Royal Bank and Scotia are boasting solid gains, too.

The health care sector is up led by a 24.5% gain in Extendicare, which posted surprisingly strong earnings yesterday.

Elsewhere in the group, Lorus Therapeutics is up about 11% on news that it has received approval from the U.S. Food and Drug Administration to begin a phase II clinical trial of a drug for metastatic breast cancer. It is also in a phase II clinical trial in the U.S. for the treatment of kidney cancer. QLT is stronger too.

CAE is up about 5% on news that it has been awarded U.S. Navy contracts worth $12 million.

The golds are a tumultuous group today, with weakness coming in Kinross and Barrick Gold.

Placer Dome reports that it is in talks to sell an idle mine in Zimbabwe. Crystallex is up almost 11% in decent trading.

Bolivar Gold has gained 8% on news that it has entered into an agreement with Griffiths McBurney & Partners and a syndicate of underwriters including BMO Nesbitt Burns Inc., Orion Securities Inc., Sprott Securities Inc., Canaccord Capital Corporation and McFarlane Gordon Inc. for a $40 million bought deal.

Metallic Ventures Gold is down more than 6% on news that it will raise as much as $25 million from a syndicate of underwriters led by Canaccord Capital Corp.

Nevsun Resources has dropped 4.4% on news of mineral reserve estimates from one of its deposits in western Mali. Meridian Gold and Glamis Gold are weak, too.

Cambior is down 2.7% on news that it has closed its $100 million bought deal, made through a syndicate of underwriters led by Sprott Securities Inc. and National Bank Financial Inc. and including CIBC World Markets Inc., Dundee Securities Corp., Orion Securities Inc. and Paradigm Capital Inc.

There is also weakness in EnCana, Ensign Resource Services and Cequel Energy.

Ivanhoe Mines is down 3.4% on news that it has entered into a comprehensive joint venture with a Chinese government entity to explore for and develop gold, copper, silver, molybdenum and other minerals on three advanced projects in the autonomous region of Inner Mongolia, China.

In earnings news, RioCan Real Estate Investment Trust reported earnings of $46.7 million in the second quarter.

Vermilion Energy Trust had second quarter earnings of $32.7 million.

Royal Gold earned $6.8 million in fiscal 2003.

Desjardins Financial Corp saw its second quarter income reach $27.4 million.

In New York, trading has been stuck in a tight range ahead of the Fed decision. No one expects much of a move from the Fed, but there is hope that its policy statement will be useful in supporting the bond market.

The Dow Jones industrial average is currently up about 12 points to 9,229. The Nasdaq composite index has gained five ticks to 1,667. The S&P 500 is up two points to 982.

The S&P/TSX Venture index is the only market that’s sliding today, down a point to 1221. Volume is average at 19.6 million shares. Trans America Industries is the day’s top trader, down 2¢ to 44.5¢ with 762,000 shares changing hands.