North American stock futures were lower on Monday after a big drop in China’s main stock index overnight.

China’s Shanghai Composite Index plunged 8.3% on Monday in its biggest one-day drop since a February drop that triggered a global market selloff. The Shanghai index fell sharply for a second day after a 2.7% decline Friday. The declines came after the Chinese government last week raised a tax on stock trading.

Despite the drop in Shanghai shares, other Asian stock markets improved. The Nikkei 225 rose 0.1% in Tokyo and the Hang Seng in Hong Kong edged up 0.62%.

In Europe, the FTSE 100 slipped 0.4% in London.

On the economic front, a report on U.S. factory orders in May is due after the open.

There are no major economic releases from Statistics Canada today.

In morning trading, the Canadian dollar was at US94.62¢, after topping US94.75¢ in overseas trading. The currency ended last week at US94.22¢, its highest level since July 1977, after surging 0.73 cent on Friday.

In M&A news, Sxr Uranium One has struck a deal to take over Energy Metals.

Palm has agreed to sell 25% of the company to a private-equity firm for US$325 million. Palm will pay US$940 million in cash, or about US$9 a share, to existing shareholders whose ownership of the company will drop to 75% under the deal’s terms.

The Bancroft family that controls Dow Jones is due to meet Rupert Murdoch to discuss News Corp.’s US$5 billion offer.

Flextronics agreed to buy Solectron in a US$3.6 billion deal. Solectron holders can opt for cash or Flextronics stock.

Health Care Properties agreed to buy U.S. biotech real estate from Britain’s Segro for US$2.9 billion. Qiagen agreed to buy Digene for US$1.6 billion in cash and stock.

AXA agreed to sell a Dutch unit for US$2.35 billion to SNS Reaal of Holland.

Crude-oil futures fell 41¢ to US$64.67 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.

Toronto stocks finished higher on Friday, getting a lift from higher commodity prices, positive U.S. economic data, and takeover speculation over Stelco.

The S&P/TSX composite index closed up 62.59 points, or 0.45%, at 14,119.37.

For the week, the benchmark index rose 0.7%, and gained 4.6% in May.

The junior S&P/TSX Venture composite index gained 33.18 points, or 1.02%, to finish at 3,274.87.

In New York, the Dow Jones industrial average and the S&P 500 closed at record finishes, as strong jobs and manufacturing data reassured investors about the health of the U.S economy.

The Dow rose 40.47 points, or 0.30%, to end at a record 13,668.11. The S&P 500 gained 5.72 points, or 0.37%, to finish at a record 1,536.34. The Nasdaq composite index climbed 9.40 points, or 0.36%, to 2,613.92.

For the week, the Dow rose 1.19%, while the S&P 500 gained 1.36% and the Nasdaq rose 2.22%.