North American markets are expected to open higher Friday, lifted by Procter & Gamble’s US$57 billion deal to buy Gillette and strong Microsoft earnings.

This morning P&G agreed to acquire Gillette for about US$57 billion in stock in a deal that will create the world’s biggest consumer-products company.

Separately, P&G said its fiscal second-quarter profit rose 12%.

After markets closed Thursday, Microsoft said strong sales of personal computers and its Halo 2 videogame helped increase sales and more than double earnings in its fiscal second quarter. The firm also raised its full-year financial forecast.

In today’s economic news, the U.S. economy expanded at a slower rate in the final three months of 2004 as climbing imports and falling exports widened the nation’s trade deficit.

The U.S. Commerce Department said that U.S. gross domestic product increased at a 3.1% annual rate in October through December, lagging the third-quarter’s 4% growth and the second-quarter’s 3.3% climb. It was the lowest rate of growth since the economy rose 1.9% in the first quarter of 2003. Economists had forecast an increase of 3.6%.

Here at home, Statistics Canada said monthly prices for manufactured goods at the factory gate rose in December for the first time since August.

Meanwhile, raw materials prices declined for the second month in a row, as prices for crude oil continue to fall.

Energy issues lifted Toronto stocks to a higher close on Thursday. The S&P/TSX composite index rose 12.05 points, or 0.13%, to close at 9,174.41.

It was the index’s third straight gain and lessened its year-to-date loss to 0.78%. Volume was strong at 296 million shares.


The junior S&P/TSX Venture composite index advanced 4.35 points, or 0.24%, to close at 1,803.96.

On Wall Street, U.S. blue chip stocks closed lower snapping a two-day winning streak.

The Dow Jones industrial average ended down 31.19 points, or 0.30%, at 10,467.40. The S&P 500 was up 0.48 points, or 0.04%, at 1,174.55. The Nasdaq composite index was up 1.06 points, or 0.05%, at 2,047.15.