Stocks look set to rise this morning as profit worries subside and a couple of M&A deals spark investor optimism.

GE Capital is buying Heller Financial Inc. for about US$5.3 billion in cash, and Swiss Reinsurance Co. is buying a unit of Lincoln National Corp. for US$2 billion in cash.

There’s also talk of asset selloffs at Pirelli SpA to help fund an earlier US$6.1 billion takeover, with the Benetton family paying up for a stake in Olivetti SpA.

In Europe, stocks are on the rise, with the M&A action in Italy driving the action. London’s FTSE is up 37 points to 5,440. In Paris, the CAC 40 has gained 73 points to 5,040. Germany’s DAX has added 55 points to 5,810.

Overnight in Asia stocks were weak. A larger-than-expected drop in Japanese industrial production sparked worries about its economy and helped the yen selloff. The Nikkei dropped 219 points to 11,579. In Hong Kong, the Hang Seng gave up 96 points to 12,087.

On the financing front, Infowave Software Inc. has a deal with Commonwealth Associates L.P. of New York and Canaccord Capital Corporation for a private placement offering between US$5 million and US$10 million of special warrants.