North American stocks are likely to rebound at the open Monday amid merger activity, as Canadian investors awaited a new federal budget from the Conservative government, to be presented after markets close at 16:00 ET.

The Canadian dollar opened at US85.02¢, down 0.07 of a cent.

In morning trading in Europe, Britain’s FTSE 100 rose 0.6%, Germany’s DAX index added 0.97%, and France’s CAC 40 rose 0.74%.

Barclays is reportedly in preliminary talks with Dutch peer ABN Amro over a merger, with other European banks also potentially interested in a deal. Barclays said Monday that it will make a statement regarding ABN Amro before the stock market opens on Tuesday.

In other M&A news private-equity firm Clayton, Dubilier & Rice announced Monday it has agreed to acquire home-services operator ServiceMaster for about US$4.8 billion.

Quanta Services announced the purchase of InfraSource Services for US$1.26 billion, hoping to capitalize on a surge of new spending for utility and telecom infrastructure.

Monday will be a quiet day for U.S. economic data, though the latest home builders’ index, due at 13:00 ET. The data will be closely watched following the slump in the housing market and worries about whether subprime mortgage woes will spread to the wider market.

In earnings news, Nortel Networks said late Friday that it expects revenue to be flat to down slightly compared with 2006, reflecting a decrease in revenues as a result of its sale of its third-generation UMTS radio-access business to Alcatel-Lucent.

Crude-oil prices fell 42¢ to US$56.59 a barrel.

Most Asian markets rose overnight. Tokyo’s benchmark Nikkei 225 index surged 265.40 points, or 1.59%, to finish at 17,009.55 points.

In Hong Kong, the blue-chip Hang Seng Index jumped 313.24 points, or 1.65%, to 19,266.74.

Toronto stocks ended lower Friday, as falling oil prices led the energy sector downward, leading the broader market into negative territory.

The S&P/TSX composite index fell 44.64, or 0.35%, to 12,829.68.

For the week, the benchmark index fell 1.7%.

The S&P TSX Venture Exchange gained 12.08 points , or 0.40%, to 3,065.62.

In New York, markets finished down, ending a volatile week in which higher inflation figures and weakness in the subprime mortgage industry led the key indices lower.

The Dow Jones industrial average fell 49.27 points, or 0.41%, to 12,110.41, the S&P500 lost 5.33, or 0.38%, to 1,386.95, and the Nasdaq composite index fell 6.04, or 0.25%, to 2,372.66.

For the week, the Dow Jones fell 1.3%, the S&P500 declined 1.1%, and the Nasdaq lost 0.6%.