A positive, if slight increase in Canadian GDP plus the continuing parade of positive corporate earnings reports are expected to give the markets a boost Wednesday.

Canadian economic activity edged up in May, as gross domestic product increased 0.1% after a setback in April, Statistics Canada reported this morning.

The economy gained strength from sharply higher sales of motor vehicles, which propelled the retailing and wholesaling sectors. The financial sector expanded as a result of the stock market’s recovery.

Later today the U.S. Federal Reserve will release the latest Beige Book, a survey of manufacturing activity around the country.

BCE is reporting sharply higher profits due to growth in mobile phone and satellite TV revenues and improved productivity. BCE earned $461 million in the April-June period, on flat revenue of $4.9 billion.

Sun Life Financial said its second-quarter profits increased five-fold to $366 million thanks to stronger earnings from Canadian operations and the improved equities markets.

Two Canadian banks are coping with their connections to the Enron debacle. Toronto Dominion Bank provided more than US$1 billion in financing to the now-defunct American energy trading company. TD says its confident that its dealings with Enron were entirely appropriate. CIBC is unlikely to recover the US$205 million it leant Enron. The Enron examiner’s report suggested CIBC knew Enron was concealing billions of dollars in debts.

In overseas trading, London’s FTSE 100 has edged up 1.1 points to 4,138.1. Frankfurt’s DAX is higher by 0.1%. Paris’s CAC40 is up by 0.7%.

In Asia, Tokyo Nikkei average closed down 201.65 points at 9,632.66. In Hong Kong, shares finished down as major tech stocks took losses.