Stocks look set to pull back from yesterday’s gains at Tuesday’s open. Profit-taking and a drop in sentiment after Agilent Technologies Inc. disappointed analysts with a bigger than expected loss, are being cited as the prime reasons for the expected opening weakness. Countering this, Home Depot’s second quarter earnings rose 28%.

In economic news, the U.S. trade deficit narrowed to US$37.2 billion in June, driven by an increase in exports.

Canada’s merchandise trade surplus fell in June to its lowest level since December 1999, as exports of forestry products, particularly lumber, plummeted and imports rose briskly, fuelled by growth in machinery and equipment. The surplus fell $1.5 billion in the past two months and has declined eight times in the past 12 months. The trade balance at the end of the first two quarters of 2002 stood at $27.6 billion, a drop of over $10.6 billion from the same six-month period of 2001. Exports of forestry products plummeted, as lumber exports recorded their largest monthly decline ever, down to levels recorded almost 10 years ago. This decrease more than offset export gains in other sectors.

Wholesale trade came in stronger for June, up 2.1%, after a flat reading in May.

In Europe, stocks are down, as traders fret over the health of corporate profits. Stocks such as AstraZeneca plc, Nestle SA and WPP Group plc are all weaker. Also, Royal KPN NV had a record loss in the second quarter. The FTSE is down 36 points to 4,390. The CAC 40 has dropped 45 points to 3,448. The DAX has slipped 43 points to 3,794.

Overnight in Asia, stocks followed the U.S. rally with some buying of their own. The Nikkei gained 22 points to 9,621. The Hang Seng added 161 points to 10,408.

In M&A news, Qwest Communications International Inc. is selling its phone-book unit for US$7.05 billion to buyout firms Carlyle Group Inc. and Welsh, Carson, Anderson & Stowe.

Also, CoolBrands International Inc. announced that it has purchased the business and assets of Chipwich, Inc., the Piermont, N.Y. No price was disclosed on the deal.