Today’s first quarter GDP reports painted different pictures of the Canadian and U.S. economies.

The Canadian economy picked up steam in the first quarter of 2007 as real gross domestic product advanced 0.9%, more than twice the pace of last quarter, Statistics Canada reported today. A slight pick-up in consumer spending and an inventory build-up resulting from strengthened production fuelled the advance.

Economic output was up 0.3% in March, StatsCan added.

The Canadian dollar opened at US93.5¢, up 0.38 of a cent.

South of the border, the U.S. economy slowed to a crawl in early 2007. Gross domestic product rose at a seasonally adjusted 0.6% annual rate January through March, the U.S. Commerce Department said in a new, revised estimate of first-quarter GDP.

It was the weakest performance since a 0.2% increase in fourth-quarter 2002 GDP.

Separately, the number of U.S. workers filing new claims for jobless benefits fell last week for the sixth time in seven weeks.

Jobless claims fell 4,000 to 310,000 on a seasonally-adjusted basis in the week ended May 26, the U.S. Labor Department said Thursday.

The four-week average rose by 1,000 to 304,500. Levels near 300,000 are usually consistent with strong monthly job growth.

In M&A news, Wachovia said it will acquire A.G. Edwards Inc. for US$6.8 billion in cash and stock in a deal to form one of the largest retail stock brokerages in the United States, pushing it past Citigroup’s Smith Barney and leaving it behind only Merrill Lynch.

In earnings news, Costco Wholesale reported a 5% profit decline, in line with analyst estimates.

Menu Foods Income Fund, which is at the centre of a massive pet food recall, said it lost $17.5 million or 91.8¢ per unit in the first quarter ending March 31.

Crude-oil futures fell 28¢ to US$63.21 a barrel in electronic trading and gold futures rose US$3 to US$662.30 an ounce.

Overseas, the Shanghai Composite Index rebounded 1.4%, lifting other Asian indexes. The Nikkei 225 climbed 1.6% in Tokyo and the Hang Seng index was up 1.7% in Hong Kong. The FTSE 100 added 0.4% in London.

North American stocks rallied Wednesday, as the Toronto exchange gained strength on a bounce back in the energy and materials sectors, and the New York markets were spurred ahead by optimism over the strength in the domestic economy.

The S&P/TSX composite index gained 118.99 points, or 0.85%, to 14,081.71, erasing the previous session’s triple-digit loss.

The S&P.TSX Venture composite index fell 25.73 points, or 0.80%, to 3,11.82.

In New York, markets hit all-time highs as investors shrugged off significant losses in Shanghai earlier on Wednesday.

The Dow Jones industrial average gained 111.74, or 0.83%, to 13,633.08, and the S&P500 gained 12.12, or 0.80%, to 1,530.23. Both closes are records.

The Nasdaq composite index gained 20.53 points, or 0.80%, to 2,592.59.