Stocks are shaking off the news that the European Central Bank has delivered a much-needed cut to interest rates, dropping 25 basis points to 4.25%.

The bank, however, has not signaled any further cuts, disappointing traders.

While traders were clamouring for an ECB cut, stocks are siding nonetheless after Sun Microsystems Inc. and Corning Inc. warned that their sales may disappoint investors.

Also, Microsoft Corp. is down on the news that the European Commission is investigating the firm as a possible monopolist.

In U.S. economic news, initial jobless claims dropped last week, personal spending was reported up 0.1% in July, and personal incomes were up 0.5% during the month. Tax refunds are helping to boost incomes, but nervous consumers appear reluctant to spend the rebates.

In Canada, it was reported that corporate operating profits rose 0.6% in the second quarter, ending a string of three consecutive quarter-to-quarter declines. Corporations earned $44.7 billion in profits, up from $44.4 billion in the first quarter but well below the peak of $50.4 billion earned in the second quarter of 2000. Financials led the way higher, followed by utilities. Oil and gas profits were weak, down 22.3%, joined by weakness in the manufacturing sector.

European stocks didn’t get a boost after the ECB’s rate cut. If anything, it was an acknowledgement that things are slowing down there, too. As if to confirm the point, Swissair Group announced plans to cut 1,300 jobs and accelerate asset sales. The FTSE is down 10 points to 5,407. The CAC 40 is off 26 ticks to 4,809. The DAX has shed 39 points to 5,266.

Overnight in Asia, stocks were mixed. Japan reported that its industrial production fell 2.8%, a greater-than-expected drop. Other weak indicators are sparking fears of more recession there, too. The Nikkei lost another 41 points to 10,938. The Hang Seng managed to gain 73 points though to 11,316.

In business news, Teleglobe is cutting 20% of its workforce, about 450 jobs. It will take a third quarter restructuring charge of between US$70 million and US$90 million, as well as a further reduction in its capital expenditure.