North American stocks are expected to open flat Wednesday as the European Union slapped Microsoft Corp. with a fine for antitrust violations.

The EU fined Microsoft US$357 million for failing to obey its 2004 antitrust order to share program code with rivals and threatened new fines of 3 million euros ($3.82 million) a day beginning July 31. Microsoft said the decision was unjust and it would take the matter to court.

In today’s economic news, Statistics Canada said the nation’s merchandise trade surplus moved up in May to $4.1 billion, from a revised $3.9 billion in April. But that missed forecasts of $4.5 billion as declines in the energy sector in May contributed to a fourth drop in exports over the past five months.

The Canadian dollar opened at US88.07¢, down a further 0.28 of a cent.

The U.S. trade deficit widened by 0.8% to US$63.84 billion during May, pressured by higher oil prices, but the shortfall was lower than expected.

In M&A news, Petro-Canada made a third unsolicited bid for Canada Southern Petroleum after markets closed Tuesday, offering US$13 per share for the junior energy company. That topped the latest offer of US$11.10 per share by Syncrude partner Canadian Oil Sands Trust.

In other market news, General Motors CEO Rick Wagoner, preparing ground for a critical meeting Friday, said yesterday that GM is open to considering an alliance with French auto maker Renault and Japan’s Nissan Motor, a proposal backed by GM’s fourth-largest shareholder, Tracinda.

Crude-oil prices rose 16¢ to US$74.32 a barrel early Wednesday following news that Iran will not respond immediately to incentives meant to resolve an international dispute about its nuclear program. A weekly oil inventory report is due later today.

Overseas, Japan’s Nikkei 225 dropped 1.5%, though Indian stocks shrugged off a wave of bombings in Mumbai on Tuesday to close higher on better-than-forecast results at Infosys Technologies.

In Tokyo, the benchmark Nikkei 225 index declined 224.5 points to 15,249.32.

European stock markets were also higher.

On Tuesday, Toronto stocks rallied Tuesday, with the energy, financials and materials sectors putting in strong sessions, as investors cheered a Bank of Canada decision to keep lending rates steady.

The S&P/TSX composite index gained 138.25 points, or 1.19%, to 11,792.98.

The Canadian central bank left its key interest rate at 4.25% and appeared to suggest in its announcement that inflation would be less of a concern in the next 18 months, negating any need to increase rates.


The S&P/TSX Venture composite index dipped 6.67 points, or 0.25%, to 2,637.37.

In New York, markets ended higher, after spending most of the session in negative territory, as investors remained bullish entering quarterly earnings report season.

The Dow Jones Industrial Average rose 31.22 points to 11,134.77. The tech-heavy Nasdaq composite index rose 11.93 points to 2,128.86. The S&P 500 gained 5.18 points to 1,272.52.