The Bank of Canada confounded all expectations this morning by cutting rates 75 basis points to 2.75%.

Economists expected a 50 bps cut, with some talk of 25. Stocks are expected to open higher as a result.

Indeed, markets are generally pointing to an up open, on the hope that yesterday’s rally follows through. Strong profits in firms such as AT&T, DaimlerChrysler and EchoStar Communications Corp. are boosting sentiment.

Results were also higher for Bristol-Myers Squibb Co. However, Lucent Technologies Inc., and Exxon Mobil Corp. all saw third-quarter profit slide.

In Europe, stocks are up with stronger profits driving the trade there too. Better-than-expected earnings from DaimlerChrysler, Orange SA and Atlas Copco AB is boosting the trade. GlaxoSmithKline plc also saw higher results. The FTSE is up 99 points to 5,169. The CAC 40 has gained 89 points to 4,430. The DAX is up 97 points to 4,716.

Overnight in Asia there was strong follow through on yesterday’s U.S.-led gains. The Nikkei added 296 points to 10,862. The Hang Seng gained 422 points to 10,220.

In M&A news, D.R. Horton Inc. is buying Shuler Homes Inc. for US$1.2 billion in cash, stock and assumed debt.

In domestic earnings news, Potash Corporation of Saskatchewan Inc. reported third-quarter net income of $11.1 million compared to $46.4 million in the same quarter of 2000, primarily due to lower nitrogen prices.

Noranda Inc. today reported a net loss of $60 million for the third quarter, compared to net earnings of $52 million for the third quarter of 2000.