North American markets are likely to open higher Thursday as investors react to news that U.S. consumer spending remained strong in July.

The U.S. Commerce Department said personal incomes grew at a slower pace in July, advancing 0.3%, while consumer spending increased by 1% amid increased demand for new cars.

Economists had called for a 0.5% gain in personal income in July, the same as in June, and a 1.1% increase in consumer spending after a solid 0.8% gain in June.

Meanwhile, the U.S. Labor Department said initial jobless claims rose by 3,000 for the week ended August. Economists had expected claims to be unchanged at 315,000.


Later this morning, the Institute for Supply Management is expected to release its August manufacturing index. Economists look for a reading of 57.0 last month compared to 56.6 in July.

As well, the U.S. Commerce Department is due to release a construction spending report for July at 10:00 ET. Economists forecast an 0.5% increase in spending.

There are no major economic releases from Statistics Canada today.

Light sweet crude for October delivery on the New York Mercantile Exchange rose 26¢ to US$69.20 a barrel.

The Canadian dollar opened trading at US84.10¢, down 0.14 of a cent.

In today’s businisess news, Leitch Technology Corp.’s board has agreed to a $592 million takeover offer from U.S. communications equipment maker Harris Corp.

Harris Corp. is offering $14 cash per share for all of Leitch’s common shares. The stock closed Wednesday at $10.80 on the Toronto Stock Exchange prior to the announcement, up 73¢ from the previous close.

Overseas, European indexes rose in afternoon action. London’s FTSE 100 gained 35.8 points to 5,332.7, while Paris’s CAC 40 was up 29.4 to 4,428.78. Frankfurt’s DAX 30 moved 26.47 points higher to 4,856.16.

Overnight, Japanese stocks hit a four-year-high after the gains overnight on Wall Street. The Nikkei 225 index rose 93.37 points to 12,506.97 points on the Tokyo Stock Exchange, the highest since July 5, 2001.

In Hong Kong, the Hang Seng index jumped 240.20 points to 15,143.75.

Toronto stocks rallied Wednesday, as the energy sector continued to roar. The S&P/TSX composite index finished up 95.88, or 0.91%, to 10,668.94.

The U.S. White House agreed Wednesday to release oil from emergency stockpiles, as Gulf Coast refineries remained out of commission, knocked out by hurricane Katrina.

The junior S&P/TSX Venture composite index finished up 9.68 points, or 0.51%, to 1,921.93.

In New York, U.S. stocks rose on as energy companies gained on surging gasoline prices, and investors shelled out for companies expected to profit from reconstruction of the storm-stricken U.S. Gulf Coast.

The Dow Jones industrial average rose 68.78 points to 10,481.60, the Nasdaq composite index climbed 22.33 points to 2,152.09 while the S&P 500 index rose 11.92 points to 1,220.33.

For the month of August, both the Dow and the Nasdaq fell 1.5%, while the S&P 500 dropped 1.1%.