Canadian stocks are powering higher today, amid news that the Canadian economy continues to outperform the U.S. At midday the S&P/TSX index is up 55 points to 6,566.

Volume remains on the low side at 83.3 million shares, with buying ahead of the selling by about 13:11. Market breadth is also bullish, with winners edging losers by a nine to eight margin.

Most of the TSX’s sectors are up today. Canadian stocks got a boost from news that May GDP was flat, which was a bit better than expected. At the same time, U.S. second quarter GDP was notably weaker than expected, and prior numbers were revised downward.

Rather than being caught in the U.S. downdraft, Canadian investors seem to be celebrating the domestic strength. The energy, gold, financial and real estate sectors are all up notably, and most other sectors are modestly higher. Techs are a weak spot, as are consumer staples.

The financials are up about 1%, led by the banks. Royal Bank and TD Bank are driving the recovery, up about 1.4% apiece. Scotia has gained 0.7% in active trading.

Insurers are notably weaker today, though. Manulife is down 3.4% in heavy trading, as investors contemplate its telecoms exposure, while Sun Life is down another 0.9%.

Joining the banks on the upside, there’s some substantial buying in blue chips such as CN Rail, EnCana, Weston, Shaw, Suncor Energy, Quebecor and Rogers. Hurricane Hydrocarbons and Baytex Energy are joining EnCana on the upside. Barrick is powering the golds higher, too, with some support from Kinross. Ballard Power is up today, too.

The downside is being led by the techs, as traders take some profits and fret over future corporate earnings. Losers include ATI, Royal Group Technologies, Research in Motion, Celestica and Solectron.

There’s also some pulling back in recent gainers Alcan, Precision Drilling, Inco and QLT.

In earnings news, Cardiome Pharma recorded a net loss of $4,062,499 in its latest quarter, compared with a net loss of $2,596,191 for the same quarter last year.

In New York, the weak U.S. GDP results are weighing on traders’ minds, re-igniting fears of a double-dip recession. That said, markets have rallied off their mid-morning lows. The Dow Jones industrial average is currently down about 49 points to 8,630. The S&P 500 has dropped four points to 899. The Nasdaq composite index is down 21 points to 1,324.

The Canadian rally is also being enjoyed in small cap land, where the S&P/TSX Venture index is up 10 points to 1,025. Volume is very weak though, at just 9.9 million shares. IBI Corp. is the top trader, although it is currently halted pending news. Ahead of the halt, it had moved 322,000 shares, and sits flat at 6¢.