North American stock markets may open flat on Monday as investors digest a proposed merger of major paper companies Abitibi-Consolidated Inc. and Bowater Inc.

In M&A news, Abitibi-Consolidated and Bowater today announced plans for to merge, in a stock-swap deal creating a firm with annual revenues of about $9.3 billion. The combined company, to be called AbitibiBowater Inc., would create a new leader in publication papers, the firms said.

In other M&A action, US Airways Group is willing to increase its hostile takeover offer for Delta Air Lines by US$1 billion under certain conditions as part of a last-ditch effort to win support from Delta creditors, according to people familiar with the matter.

UK’s Prudential has agreed to sell its Egg banking business to Citigroup for £575 million (US$1.13 billion).

Merrill Lynch entered an agreement to acquire First Republic Bank for US$55 a share, or about US$1.5 billion, in both cash and stock, bolstering its wealth-management business.

In earnings news, Verizon Communications posted a 38% drop in fourth-quarter profit, hurt by charges related to divesting itself of noncore businesses to shed debt.

The Canadian dollar opened at US84.57¢, down 0.18 of a cent.

Oil prices fell Monday despite forecasts of continued cold weather across the U.S. East Coast. Light sweet crude for March delivery fell 34¢ to US$55.08 a barrel in electronic trading on the New York Mercantile Exchange by early afternoon in Europe.

Key European indexes rose in early action.

In Asia, Tokyo’s Nikkei 225 index rose 48.53, or 0.3%, to close at 17,470.46.

In Hong Kong, the benchmark Hang Seng Index ended the session down 44.45 points, or 0.2%, to finish at 20,236.68.


Toronto stocks ended higher Friday, as a rebound in the price of oil boosted energy stocks and lifted the market overall.

The S&P/TSX composite index moved up 51.98 points, or 0.40%, to 12,979.26.

For the week, the benchmark index finished 2% higher.

The S&P/TSX Venture composite index gained 32.15 points, or 1.12%, to 2,902.00.

In New York, markets were mixed, ending a bearish week, as investors awaited the U.S. Federal Reserve’s interest rate announcement next week.

The Dow Jones industrial average fell 15.54 points, or 0.12%, to 12,487.02, and the S&P 500 was off 1.72, or 0.12%, to 1,422.18.

The Nasdaq composite index inched ahead 1.25 points, or 0.05%, to 2,435.49,

Each of the three indexes lost 0.60% for the week.