Stocks are facing a down open this morning after Microsoft Corp. issued a profit warning. Nortel Networks Corp. has more or less met its projected loss – the largest in Canadian corporate history. The company is also suggesting that telecom spending may not recover until the second half of 2002. Ericsson AB has posted a second-quarter loss and lowered its forecasts for the year.

In economic news, the Consumer Price Index rose just 0.1% in June, the fifth consecutive month-to-month increase. The greatest upward pressure on June’s index came from rising prices for electricity, travel accommodation, air transportation, women’s clothing and restaurant meals. On an annual basis,
the CPI is running at a 3.3% rate on the headline, down from 3.9% in May. Excluding energy, the CPI rose 2.5% in June, down from 2.7% in May.

In other economic news, wholesale sales reached a record high in May on widespread gains in most sectors – especially farm equipment and the lumber industry. Sales rose 1.8% from April to $32.7 billion, breaking the previous record of $32.4 billion set in July 2000. Nine of the 11 wholesale sectors reported increases in May.

In Europe, stocks are down on the general skepticism facing the tech sector. Also, Vodafone Group plc said it is cutting its spending on new cell-phone networks. At midday, the FTSE is down 72 points to 5365. The CAC 40 has dropped 79 points to 4851. The DAX is down 105 points to 5725.

The Japanese market was closed for a holiday. The Hang Seng finished the week with a modest gain, up 22 points to 12302.

In other news, oil prices are up after several OPEC ministers suggested that they would cut production to stem a price slide.

Lorus Therapeutics Inc. today reported for the year ended May 31. It incurred a loss of $15,213,000 (11¢ per share) compared to a loss of 10¢ for the previous fiscal year.

Legg Mason Inc. reported net earnings of US$35.4 million for the quarter ended June 30, down 12% from the June 2000 quarter. Diluted earnings per share were 52¢, down 13% from 60¢ in the prior year.

Air Canada and IBM announced a seven-year, $1.4 billion strategic partnership to e-enable the airline, enhance customer service and develop future solutions based on IT infrastructure. As a result of this agreement – the largest IBM airline services agreement worldwide – Air Canada expects to save approximately $200 million in IT costs over the term of the contract. As strategic business partners, IBM and Air Canada will work together pursuing new business opportunities in the areas of customer service and leading-edge travel industry solutions.

Hudson’s Bay Company provided earnings guidance this morning, saying it expects second quarter earnings per share to be in the range of 8¢ to 12¢, excluding the positive impact of accounting rule changes. Including that effect, it expects earnings per share to be between 12¢ and 18¢ for the second quarter ending July 31.