By James Langton

(May 18 – 09:00 ET) – Stocks are poised for a down open this morning, after earnings warnings from Palm Inc. and Dell Computer Corp. Agilent Technologies Inc. also reported disappointing results.

In economic news, the U.S. trade deficit increased in March to US$31.2 billion. The 16% increase is its largest month-over-month rise in nine years. Higher imports were the big reason, growing to US$120.6 billion from $117.2 billion in February. Exports slipped 1%.

Canada’s merchandise exports increased 2.3% to just over $36.0 billion in March, while imports rose 1.7% to $29.9 billion, leaving a $6.1 billion surplus. Higher exports came in the machinery and equipment sector, largely high-tech and agricultural and fishing products, while imports grew at a
slightly slower pace.

Wholesale sales rose 1.7% in March to $32.2 billion, driven by the auto sector. This gain almost completely offset February’s drop.

In Europe, stocks are shrugging off tech worries, gaining mainly in the energy sector. The FTSE in London is up nine points to 5913. The Paris CAC 40 has gained 51 points, climbing to 5644. The German DAX is up nine points to 6182.

One European stock that’s not doing well is Alcatel SA. It is down almost 10% after rumours resurfaced about a possible takeover of Lucent Technologies Inc. for more than US$40 billion, mostly in stock. In other M&A news, the Oppenheimer family and Anglo American plc have won investor support to buy De Beers.

Overnight in Asia, stocks slid and the Yen fell after the Bank of Japan said it will start buying government debt. There are fears it may devalue the currency in the process. the Nikkei closed down 33 points to 13878. The Hang Seng dropped 179 points to 13459.