Stocks look poised for a strong rally this morning on some surprisingly strong U.S. jobs data.

The U.S. unemployment rate unexpectedly fell to 5.5% in February as 66,000 new jobs were created last month. Traders are taking it as a sign that the recovery may be faster than expected.

In Canada, after a large gain in January, employment remained virtually unchanged in February, up just 6,000. The increase was all due to full-time employment, up 16,000, which was partly offset by part-time losses. The unemployment rate remained at 7.9%. The recent strength follows a period of little job growth over most of 2001.

Also, the seasonally adjusted annual rate of housing starts in Canada declined 12.3% in February to 179,800 units, according to Canada Mortgage and Housing Corporation. Urban singles were up 11.6%, and urban multiple starts fell 37.3%.

Stocks are already rallying in overseas markets, thanks to the rosier economic outlook. The FTSE is up just a point to 5,283. The CAC 40 has gained 16 ticks to 4,632. The DAX is up 51 points to 5,341.

Overnight in Asia, stocks closed the week up there too. The Nikkei gained 237 points to 11,886. The Hang Seng tacked on another 45 points to 11,233.

In M&A news, ScottishPower plc is selling its Southern Water unit to a group of investors backed by Royal Bank of Scotland Group plc, for US$2.9 billion.