Federal Finance Minister John Manley delivered what was widely seen as a good news budget Tuesday, but North American markets are likely to open lower Wednesday as anxiety over Iraq hangs on. U.S. index futures are pointing to a weak open.

Canadian wholesalers posted a seventh consecutive monthly increase in their sales in December. Wholesale sales reached $36.1 billion, up 0.3% from November, following gains of 0.6% in November and 1% in October.

Statistics Canada said Wednesday that wholesale sales increased in seven of the 11 trade groups in December. The lumber and building materials industry recorded the greatest gain in terms of value, with sales up 3.2%. Sales in this industry rebounded vigorously in December, after dropping 2.1% in November. Other industries reporting increases in their sales were food products (+1.3%), the other products category (+1.5%) and household goods (+6.3%). The increased sales in these industries were offset in part by declines in the automobile sector (-2.0%) and computers and software (-1.3%).

U.S. housing starts unexpectedly rose 0.2% in January as the housing sector remained the strongest part of the economy. But building permits declined, suggesting the sector is poised to cool.

European stocks were lower in morning trading Wednesday, led downward by Deutsche Telekom, which shed 6.4% on news of a bond issue. That dragged Frankfurt’s DAX index 33.18 points lower to 2,706.96.

In London, the FTSE 100 index was down 0.6 points at 3,728.9. Paris’s CAC 40 index was down 21.79 points at 2,916.84.

Asian exchanges were mixed. Tokyo’s Nikkei dipped 14.53 points to 8,678.44. In Hong Kong, the Hang Seng index rose 30.58 points to 9,427.63 on mild gains in property stocks.

North American stock markets closed higher Tuesday as U.S. investors returned from the Presidents’ Day long weekend to drive the Dow Jones industrial average up 132.35 points to 8,041.15.

Toronto’s S&P/TSX composite rose 28.44 points to 6,592.55, while the Canadian dollar gained 0.18 cent to US66.10¢ as traders awaited the comprehensively telegraphed budget.

The Nasdaq rose 36.37 points to 1,346.54 and the S&P 500 index gained 16.28 points to 851.17.

In earnings news, Ballard Power Systems narrowed its losses slightly in the fourth quarter as the fuel cell maker generated sharply higher revenues and cut costs. The company reported Wednesday it lost US $35.3 million for the three months ended Dec. 31. That compared with a loss of US$36.8 million the previous year.

Heroux-Devtek Inc. reported a $6.8 million loss in its latest quarter as the company took a charge to restructure its U.S. business in the wake of slumping aerospace sales. The company said Wednesday it lost $6.8 million for the three months ended Dec. 31. That compared with a profit of $4.6 million a year ago. The aircraft parts makers said quarterly sales fell nearly 25% to $59.4 million from $78.9 million.

Volkswagen AG reported Wednesday that its 2002 net profit tumbled 11% to US$2.76 billion, just a shade below what analysts had forecast. Revenue fell 1.8% to 86.95 billion euros, in line with a 1.9% decline in deliveries to customers and 1.7% fall in production, Europe’s largest carmaker said.

Royal Bank is expected to release it’s 2003 first quarter earnings later today.