North American stocks may climb Friday after a government report showed U.S. consumer prices were unexpectedly flat in February.

The consumer price index was unchanged in February both overall and when volatile food and energy prices were excluded, the U.S. Labour Department said today.

The benign inflation reports clears the way for a large interest rate reduction by the U.S. Federal Reserve next week .

Wall Street economists had expected a sharper 0.2% rise in both the headline and core indexes last month.

The University of Michigan’s U.S. consumer-confidence index is set for release at 10:00 ET.

Here at home, the labour productivity of Canadian businesses fell for the first time in more than a year in the fourth quarter, Stastistics Canada said.

In the fourth quarter, productivity lost 0.8%, after posting a slight 0.1% increase in each of the previous two quarters, and a 0.5% gain in the first quarter. For 2007 as a whole, labour productivity increased a mere 0.5%, the lowest annual increase since 2004.

Separately, StatsCan reported that national net worth reached $5.5 trillion by the end of the fourth quarter of 2007, or $165,400 per capita. National net worth grew by $77 billion in the quarter, an increase of 1.4% over the previous quarter, a somewhat faster pace than the 1.0% in the previous quarter.

In today’s M&A news, Russian steelmaker Evraz announced today it has purchased Canada’s IPSCO Inc. for a net cost of US$2.3 billion.

IPSCO became a wholly owned subsidiary of Swedish steel company SSAB in July 2007.

Gold futures hovered around US$1,000 an ounce Friday morning, while crude-oil futures are weaker Friday in light profit taking after making new all-time highs every day this week. Oil futures were 52¢ lower at US$109.81 a barrel.

Asian indexes ended mostly lower, as the weak dollar battered Tokyo’s exporters.
The Nikkei 225 Stock Index fell 1.54% to close at 12,241.60 on the Tokyo Stock Exchange.

In Hong Kong, the Hang Seng Index fell 0.29% to 22,237.11 on concerns about monetary-policy tightening on the mainland.

European shares were mixed in morning trade.

The UK’s FTSE 100 Index rose 0.2% to 5,703.50, the German DAX 30 slipped 0.1% to 6,497.26 and the French CAC-40 slid 0.1% to 4,628.03.

North American stock markets recovered from earlier losses Thursday after ratings agency Standard & Poor’s said it sees the end to recent run of bank writedowns.

In Toronto, the S&P/TSX composite index closed up 146.15 points, or 1.10%, to end at 13,443.50.

The junior S&P/TSX Venture composite index rose 7.45 points, or 0.28%, to end at 2,680.67.

In New York, stocks rebounded after S&P said the end to subprime-related writedowns is in sight. The ratings agency said writedowns for large financial institutions are likely past the halfway mark

The Dow Jones industrial gained 35.50 points, or 0.29%, to end at 12,145.74. The S&P 500 gained 6.71 points, or 0.51%, to close at 1,315.48.

As well, the tech-heavy Nasdaq composite index gained 19.74 points, or 0.88%, at 2,263.61.