Stocks look set to open weaker this morning after yesterday’s big rally.

Traders are expected to engage in a round of profit taking before today’s direction is established. Also unnerving traders is news that the SEC is investigating energy trader Dynegy Inc.

In economic news, U.S. initial jobless claims slipped 11,000 to 411,000 last week, the lowest in nearly two months. However, the rise in continuing claims indicates the labor market remains very soft. The number of American workers receiving state unemployment benefits rose by 61,000 to a 19-year high of 3.8 million in recent weeks, the U.S. Labor Department said Thursday.

U.S. import prices came in 1.4% higher in April. Most of the gain is due to higher energy prices though, ex-energy the gain was just 0.4%.

In Canada, the Help-wanted Index remained almost unchanged at 126.6 in April, up only 0.2% from March. This is the third consecutive small month-to-month increase following fifteen months of declines.

Stocks are backing off a bit in Europe. The Bank of England left rates unchanged at a policy meeting there today. The FTSE is down eight points to 5,201. The CAC 40 has dropped two points to 4,402. The DAX has shed 31 points to 4,997.

Overnight in Asia, stocks were mixed as usual. The Nikkei gained 113 points to 11,633. The Hang Seng, however, lost 68 points to 11,701.

There’s lots of Canadian M&A news today. First, Dynacare Inc. has entered a definitive agreement with Laboratory Corporation of America Holdings to sell all of the outstanding shares of Dynacare for US$480 million. In addition, LabCorp will assume approximately US$205 million in Dynacare debt.

Enbridge today announced that it has agreed to sell its 100% interest in the Cornwall Street Railway Light and Power Company Limited to Fortis Inc. for $67 million cash. The sale, which is subject to approval by the Competition Bureau and the Ontario Energy Board, is expected to close in the third quarter.

Wescam announced that the company is pursuing a number of strategic business alternatives, including the potential sale of the business, to maximize shareholder value. The company has engaged Quarterdeck Investment Partners, LLC to assist management in achieving this goal.

Draxis Health Inc. says that it is in continuing negotiations with respect to the final terms and for the previously proposed sale of its Canadian pharmaceutical sales and marketing division to Elan Corporation plc. DRAXIS expects to close the transaction, assuming all remaining issues are satisfactorily resolved with Elan and other licensors.

In earnings news, Gildan Activewear Inc. reports that net earnings for the second quarter were $16.4 million, compared with $18.7 million in the second quarter of fiscal 2001. Earnings were ahead of the company’s guidance, as well as the consensus of analyst estimates.

After recording special charges and other non-recurring items amounting to US$12.5 million, Zarlink recorded a fourth quarter net loss of US$22.3 million. This compares to a net loss of US$265.9 million in the fourth quarter of last year. For fiscal 2002, the company recorded a net loss of US$120.8 million. This compares to a net loss in 2001 of US$270.8 million.

IMAX Corporation reported net earnings of 32¢ per share for the first quarter.

For the 2002 fiscal year, MAAX recorded net income of $21.7 million, compared with net income of $22 million for the previous fiscal year.