As expected, the Bank of Canada has lowered its target for the overnight rate by 25 basis points to 2%.

In other economic news, Statistics Canada reported that investment in non-residential construction caught a chill in the first quarter this year, edging down slightly from a record high in the previous quarter.

Investment slipped 0.3% to $6.7 billion, which was still a record high for the first three months of any year. The decline comes after six months of growth.

In a separate release, StatsCan said the prices of new homes in February rose 0.4% from January due to higher labour and material costs.

South of the border, U.S. retail sales surged in March as consumers purchased cars, clothes and gardening supplies.

Retail sales rose by a much stronger-than-expected 1.8% last month, the U.S. Commerce Department said this morning following a revised 1.0% gain in February. Wall Street economists were expecting a gain of about 0.7%.

Retail sales were boosted by a 2.1% gain in auto sales. Without auto sales, overall retail sales would have risen by 1.7%.

The U.S. Commerce Department is also due to release February business inventories at 10:30 ET. Economists expect a moderate 0.4% rise in business inventories for the month.

In today’s earnings news, MERRILL LYNCH POSTED a 95% rise in first-quarter net profit, on strong growth in all three of its business segments. Revenue at the investment bank and brokerage firm rose 27% to US$6.1 billion.

Johnson & Johnson said its net income surged 20% in the first quarter, as all three business divisions saw double-digit sales gains, with particular strength outside the U.S.

After the markets closes, Chip-maker giant Intel, will report its earnings after the market closes.

European stocks are higher in midday trading, led by technology shares.

In London, the FTSE 100 is up 0.8% to 4,523.6. In Paris, the CAC 40 has gained 38.40 points, or 1%, to 3,778.51. In Frankfurt, the Xetra DAX Index is up1.5% to 4,072.

Asian stock markets closed higher. Tokyo’s Nikkei rose 85.12 points, or 0.71%, to 12,127.82. It was the third time in two weeks that the blue-chip index has finished at a 32-month high.

In Hong Kong, the blue-chip Hang Seng Index rose 122.44 points, or 0.94%, to 13,031.81. The Hong Kong market was closed on Friday and Monday for the Easter holidays.

On Monday, the S&P/TSX composite index ended up 65.29 points, or 0.74%, at 8,898.77 on a volume of 164.5 million shares worth $1.95 billion. It was the benchmark’s best finish since February 2001.

On Wall Street, the Dow Jones industrial average rose 73.53 points, or 0.7%, to 10,515.56. The S&P 500 edged up 5.91 points, or 0.52%, to 1,145.23. The tech-heavy Nasdaq composite index rose 12.60 points, or 0.61%, to 2,065.48.

The Canadian dollar closed down 0.50¢ to US74.87¢, at one point drifting as low as US74.59¢.