Stocks are powering higher on the first real day of trading for 2004. With most traders back at work today, the S&P/TSX index is jumping 60 points to 8,354, on strong volume of 149.1 million shares.

In economic news, Statistics Canada released the latest numbers on manufacturers prices. They continued to weaken in November — down 0.4% from October. Compared with November 2002, prices fell 4%, largely as a result of the continuing effect of a strong Canadian dollar against the U.S. dollar. Without the dollar’s influence, the Industrial Product Price Index (IPPI) would have risen 1% rather than falling 4.0% from a year ago.

The absence of producer price inflation is fuelling speculation that Canadian interest rates may go lower, and this is helping to boost stocks.

On the TSX buyers are ahead of sellers by a margin of 48:21. Market breadth is also decidedly bullish, with winners outnumbering losers by a margin of about four to three.

Almost every sector has seen gains, led by 2.4% jumps in golds, miners and techs. Energy stocks and materials are strongly higher, too. Only real estate and consumer staples are down notably.

Nortel is leading the tech group higher, up about 2% on decent volume of 9.3 million shares. Celestica is powering almost 3% higher, and there is also strength in Research in Motion.

Natural resource shares are really enjoying heady gains on the feeling that the world economy is recovering, despite the hobbling effects of the strong dollar. Alcan is up just 0.5%, but Noranda has gained almost 4%, and there are big gains in names such as Placer Dome, Kinross, Barrick, Wheaton River, Minefinders, Rio Narcea Gold, Eldorado Gold, Iamgold, and Ivanhoe Mines.

On the energy side, there are big gains, led by a 1.4% move in EnCana. Talisman Energy is up more than 2%, Canadian Natural Resources has added 3.5%, and there is strength in Petrokazakhstan.

But there is also weakness in the energy group, in the form of Paramount Energy Trust, which is down 11% on news that some of its natural gas capacity will have to be shut down.

Other gainers include Onex, TD Bank, Royal Bank, and ConjuChem.

Air Canada is taking a thumping today, down 20% in heavy trading, as traders decide to purge the troubled airline from their new year’s portfolios.

There is also selling in SFK Pulp Fund, Sino-Forest, Stelco, Domtar and Celtic Exploration.

In business news, Cameco Corp. said that it will spinoff its gold assets in a new company. Cameco and the Kyrgyzstani government have agreed to transfer all of Kumtor Gold Co. to a new jointly owned Canadian company called Centerra Gold Inc. In conjunction with its acquisition of KGC and Cameco’s other gold assets, Centerra intends to undertake a public offering in Canada. Cameco expects to hold a majority interest in Centerra following the IPO. Cameco subsidiaries will initially hold 67% of Centerra after transferring its one-third interest in KGC and additional gold-related assets.

Also, Placer Dome and Newmont Mining have now completed their joint venture transaction at Turquoise Ridge in Nevada. Newmont has acquired a 25% interest in the joint venture, which includes the Turquoise Ridge and Getchell deposits.

Rogers Communications has released selected preliminary subscriber results for the fourth quarter and the initial financial and operating guidance for 2004. Rogers Cable expects to generate operating profit before management fees in the $710-million to $730-million range for full year 2004. Rogers Wireless expects to report operating profit is expected to be in the $820-million to $845-million range in 2004. And, Rogers Media expects to report operating profit before management fees of between $115-million to $120-million in 2004.

In New York, traders are launching the new year with a heady rally of their own. The Dow Jones industrial average is up 72 points to 10,482 in solid volume. The Nasdaq composite index has gained 25 points to 2,032.

The junior S&P/TSX venture composite index is joining in the fun, gaining 16 points to 1782. Volume is solid, if unspectacular, at 36.4 million shares. ECU Silver Mining is leading the way, up 3.5¢ to 31¢ on more than 1 million shares.