After some early weakness, market averages are battling back to their positions at Thursday’s open.

At midday, the S&P/TSX index is down just two points at 7,610.

Volume is strong at 107.6 million shares, with selling holding an almost three to two edge on the buying action.

Market breadth is also certainly negative, with losers outnumbering winners by 12 to seven.

Trepidation in the telecom sector has dissipated, and the financials are rallying as a result, providing support in an otherwise weak and nervous market.

Golds are sliding, and there’s selling in consumer stocks, tech stocks, biotechs and utilities.

BCE is leading the way back today, up 2.5% in active trading. There’s also strength in Telus.

The telecom-exposed financials are rallying right along with the phone firms. Royal Bank is up 1.3% in active trading. Bank of Nova Scotia and TD are up, too.

None of this is helping National Bank, which reported income before good will charges of $122 million, compared with $145 million for the corresponding quarter of 2001. During the quarter, the National Bank increased its provision for credit losses by $100 million following a decision by BCE Inc. to cease providing financial support to its Teleglobe subsidiary.

Strength in the banks is taking some of the steam out of Sun Life, which is down 0.7% in active trading today.

Other gainers today include, Petrobank, Canadian 88, Finning, Extendicare, Quebecor World and Inmet Mining.

Golds are losing a little of their lustre today, as recent gains are given back. Barrick is down 2%. Bema Gold has dropped 8%, and there’s weakness in Kinross, Glamis, TVX Gold, Eldorado Gold and Nevsun. Pan American Silver and Corner Bay Silver continue to trail the golds down. The only gold that’s gaining is Placer Dome, up 1.4%, on news that its latest takeover target wants to see a higher bid than Placer’s $1.9 billion unsolicited offer.

Assorted other losers include Nortel Networks, down another 2.2%, and ProMetic Life Sciences.

CP Ships has been busy today, buying Italian container shipping company Italia di Navigazione for US$40 million in cash.

Falconbridge has filed for a new offering of US$200 million in 10-year notes. The net proceeds of this offering will be used to repay amounts outstanding under Falconbridge’s commercial paper program.

In New York, stocks remain doggedly lower at midday. The Dow Jones industrial average is down 38 points to 9.885. The S&P 500 is down five ticks at 1,063. The Nasdaq composite index has dropped five points of its own to 1,619.

The small caps are sliding today, pushing the S&P/TSX Venture index down seven points to 1,226. Volume is strong once again at 27.1 million shares. Aquarius Coatings is the top trader on the day, flat at 2¢ on 1.5 million shares.