The U.S. Federal Reserve has cast a shadow over trading this week. Markets declined Wednesday, and this morning overseas markets and futures trading continue to follow suit, pointing to a weak opening for equities.

On Tuesday Federal Reserve governor Alan Greenspan was cautious about corporate America and a recovery in the second half of the year. American employers have cut more than 500,000 jobs so far this year, and forecasters expect the cuts to persist in May. The Federal Reserve has hinted it may cut interest rates again to spur employers back into hiring mode.

More bad news came out of the U.S. Dept. of Labor this morning. While initial jobless claims fell by a larger-than-expected 28,000 to a one-month low of 425,000 last week, the four-week moving average rose to 446,000, the highest level in more than a year. The Labor Dept. revised its estimate of initial claims for the week of April 26, raising it by 5,000 to 453,000.

Here in Canada, the dollar has dropped. It’s trading at US71.10¢, down 0.46 cent from Wednesday.

Bell Canada has confirmed that it will be streamlining into three divisions reflecting its client base and wiping out the distinctions that had led to separate Ontario and Quebec units.

Mutual fund dealer Assante Corp. is reporting that it nearly doubled its first-quarter profit to $10 million, due to cost cutting and one-time gains from asset sales. Revenue is up 6% to $104.7 million.

In Asia, the Nikkei average lost 78.22 points to 8,031.55 overnight. Sony, Canon, Toyota, Honda were hurt by the rising value of the yen against the American dollar.

Financial markets were closed for public holidays in Hong Kong.

In Europe, London’s FTSE 100 index is off 1.1% at midday. Frankfurt is down 1.4%. Paris has declined 1.5%.

Meanwhile, the European Central Bank has decided to leave all key interest rates unchanged, as expected. But hopes are growing in markets for an easing next month. The ECB’s key lending rate stands at 2.50%. The ECB decision follows the Bank of England’s announcement today to leave its key lending rate unchanged at 3.75%.