Stocks are sliding as traders sense that the U.S. recovery may be weakening, and current market gains are overdone. There is no economic data out on either side of the border to either bolster, or debunk, this theory, and many traders are taking profits in blue chip resources.

At midday, the S&P/TSX composite index is down 30 points to 8,375. Volume is very heavy at almost 205 million shares, with buying leading the selling by an 11 to eight margin. Market breadth is certainly bearish, however, with losers outnumbering winners 63:50.

Mining shares are taking it on the chin today, down 3.4%. There are also substantial drops in golds and materials, down 2.6% and 2.3%, respectively.

Smaller drops are evident in most other sectors, although a huge rally in techs is bailing out the index overall.

The tech group is up 3.7%, thanks to big gains in Nortel.

Nortel is racing to a 12% gain this morning on huge volume of 54 million shares, after it was reported that Verizon Communications Inc. will be using its equipment to provide Internet-based telecom service. This big rally in Nortel is also spilling over to a host of tech names, including Certicom, Mitec, Sierra Wireless, Zarlink, ATI, Research in Motion and GSI Lumonics.

However, this big jump in Nortel isn’t enough to bail out what’s an otherwise very negative trade. Placer Dome is leading the gold group down, sliding 4%.

Inco is leading other miners lower, with a 2% drop, and Alcan and Falconbridge are both down about 3%.

There is also compelling selling in Barrick, Stelco, Dofasco, Sherritt, Teck Cominco, PetroKazakhstan, Ivanhoe Mines, First Quantum, EnCana and Nexen. BCE is adown about 1.8%.

There is also selling in the heavily weighted financial services group, led by a 1.6% drop for TD Bank. Royal Bank and Scotia are down, too, although Manulife and CIBC are both bouncing a bit.

Other gainers include Penn West Petroleum, Impact Energy, Constellation Copper and TLC.

In earnings news, Exfo Electro-Optical Engineering reported a loss for the first quarter of fiscal 2004 which totalled $2 million, compared with a net loss of $10.1 million for the fourth quarter of 2003 and a net loss of $2.2 million for the first quarter of 2003. Although, this year, the results include a non-recurring tax gain of $1.4 million.

In New York, technology shares are making gains, but the blue-chip stocks are selling off. The Dow Jones industrial average is down about 29 points at midday to 10,510. The tech-heavy Nasdaq composite index is up seven ticks at 2,064.

The junior S&P/TSX Venture index is also down 11 points to 1,771. Volume is average at about 37.5 million shares, led by Calvalley Petroleum Inc. It is up a penny to $1.31 on almost 1.8 million shares traded.