Stocks are enjoying a modest rally Monday in very light trading. At midday, the S&P/TSX composite index has gained just 15 points to sit at 6,570.

Volume is terrible, with just 64.2 million shares crossing the floor. It is closely split between buying and selling, with sellers holding a slight advantage. Market breadth is decidedly negative though, with losers outnumbering winners by a better than eight to seven margin.

Mirroring the lack of conviction in the market generally, the TSX sectors are split and moving moderately. Tech stocks, consumer plays and financials are all up a bit, while Materials, golds and diversifieds are weaker.

Traders are on the fence ahead of tomorrow’s interest rate decision by the Bank of Canada. As well, news of a the arrest of an alleged terrorist mastermind in the Pakistan on the weekend and signs of Iraqi compliance with U.N. demands is easing the market’s nervousness a little.

The financials are dominating trading today. Canada Life is down 1% in active trading on news that Manulife has dropped out of the bidding for the firm. Manulife is up 2.5% on the news. Canada Life’s apparently victorious suitors, Great-West Life and Power Financial, are both down about 2%.

Among the big banks, BMO and TD are both up notably. Royal Bank is up a little, and CIBC is off a bit.

Nortel is leading the tech group higher. It is up 5% on light volume of 7.6 million shares. It is getting some buying support from ATI and Celestica.

Other gainers include First Calgary Petroleum, Abitibi, Methanex, Fairmont, Bombardier and Southwestern Resources.

On the downside, Inco has dropped almost 5% on news that it is issuing a more debt. Inco expects to make separate, but concurrent private offerings of its convertible debentures and subordinated convertible debentures of about US$400 million. Each offering is currently expected to close in early March. The net proceeds from the concurrent offerings are expected to enable Inco to redeem its convertible redeemable preferred shares.

Placer Dome is down 4% on news that it is issuing debt, too. It intends to offer $200 million of debentures in a private placement, subject to market and other conditions. Placer Dome intends to use the net proceeds from this offering to redeem all of its outstanding subordinated debentures. Any remaining funds will be used for general corporate purposes, which may include working capital.

The roster of other notable losers is led by golds including Glamis, Agnico Eagle, Goldcorp and Meridian Gold.

Also, San Francisco Boutiques has completed the sale of the 12 stores operating under the banner “L’Officiel,” which specializes in garments for businesswomen as well as professionals. The acquisition price, payable in cash from Boutique Tristan & Iseut Inc., is approximately $2 million including the value of the inventories.

The S&P/TSX Venture index is one point higher at midday to 1,107. Volume is very light at just 13.1 million shares. Aventura Energy is the day’s top trader, flat at 43¢ on 510,000 shares.

In New York, stocks are off their intra-day highs, but remain positive, primarily on encouraging geopolitical news. The Dow Jones industrial average is up 15 ticks at midday to 7,906. The S&P 500 is up one point to 842. The Nasdaq has shed four points to 1,334.