Stocks appear set to rally at the open this morning after the European Central Bank and Bank of England both cut interest rates. Also, stronger-than-expected results in Global Crossing Ltd. and Activision Inc. are boosting optimism for corporate profits.

One other piece of good news, the report that spooked traders last week, the U.S. Initial Jobless Claims, was reported down 41,000 last week from a five year high.

The Bank of England’s 25 basis point cut was fully expected by the market, but a 25 bps cut by the European Central Bank was entirely unexpected, as most economists thought the ECB was more afraid of inflation than slowing growth.

This is the first rate cut in two years by the ECB. It is boosting stocks across Europe, particularly techs and financials. The FTSE is up 69 points to 5,962. The CAC 40 is up 102 points to 5,595. The DAX has gained 134 points to 6,198.

One European firm that isn’t doing so well amidst the rally is British Telecommunications plc, which has unveiled plans to sell US$8.4 billion of new stock. It is canceling some dividends in an effort to cut debt.

In M&A news, FelCor Lodging Trust Inc. is buying MeriStar Hospitality Corp. for US$2.7 billion in cash, stock and assumed debt to create the largest hotel-owning real estate investment trust.

Overnight in Asia stocks were mixed. The Nikkei dropped 67 points to 14,018. The Hang Seng added 20 points to close at 13,605.

In earnings news, AltaGas Services Inc. net income slipped to $5.4 million or 14¢ a share compared to 16¢ a share in the first quarter of 2000.

Drillers Technology Corp. reports for the three months ended March 31, it enjoyed net earnings of $2.2 million, up from just $900,00 last year.