U.S. stocks are expected to stage a rally Monday morning, getting a boost from M&A news, as second-quarter earnings season kicks off.

The Canadian dollar opened at US89.05¢, down 0.69 of a cent, one day before a possible interest rate hike in Canada.

In M&A news, Centro Watt, an Australian and American joint venture, agreed to purchase strip-mall owner Heritage Property Investment Trust for about US$1.83 billion in a deal that will more than double its U.S. presence in the sector.

Kimco Realty agreed to buy mall owner Pan Pacific Retail Properties for US$2.9 billion, plus the assumption of US$1.1 billion in debt.
Alcoa is due to report its corporate results after the close.

In other business news, Toyota Boshuku Corp. says it will build a $65 million parts plant in Woodstock, Ont., creating 330 jobs. The plant will supply seats, door trim and carpets for 150,000 vehicle units annually for automaker Toyota Motor Corp. which is building an assembly plant in the southern Ontario city.

Monday’s data release calendar includes U.S. wholesale inventories for May, which are expected to rise 0.6% after a 0.9% rise in April. Consumer credit statistics also are due for release.

Crude-oil prices fell 49¢ to US$73.60 a barrel in early trading Monday amid easing worries about Iran’s nuclear dispute.

Overseas, Japan’s benchmark Nikkei 225 index gained 245.2 points, or 1.6%, to finish at 15,552.81.

In Hong Kong, the blue-chip Hang Seng Index rose 144.03 points or 0.9% to 16,603.81.

European stock markets also gained.

Toronto stocks ended modestly higher Friday, as a rally among financials offset a weak day in the energy sector. Meanwhile U.S. markets dropped as investors reacted to economic news that suggested inflation could be a concern.

The S&P/TSX composite index rose 29.90 points, or 0.26%, to 11,631.91.

For the week, the benchmark index added 19.03 points.

The S&P/TSX Venture composite index rose 3.94 ponts, or 0.15%, to 2,688.16.

In New York, a weaker-than-expected job growth report and evidence of wage appreciation fuelled a sell off.

The Dow Jones industrial average fell 134.63 points, or 1.2%, to end at 11,090.67. The Nasdaq composite index dropped 25.03 points, or 1.2% to 2,130.06, while the S&P 500 ended down 8.60 points, or just under 0.7%, at 1,265.48.

On the week, the Dow Jones lost 0.5%, the Nasdaq retreated 1.9% and the S&P 500 shed 0.4%.