Stocks are expected to open lower this morning. The U.S. Commerce Dept. has revised its estimate for third-quarter gross domestic product growth down to negative 1.1%.

The drop has some traders wary of any hope for recovery.

Semiconductors look particularly weak today after Novellus Systems Inc. made some negative noises about its sales forecast.

In Canada, the GDP numbers were also ugly. Real GDP edged down 0.2% in the third quarter, the first quarterly decline since 1992.

Exports fell for the fourth consecutive quarter. Businesses drew down inventories. Corporate profits fell 13.9%, the second consecutive quarter of decline.

For September, the economy saw one of its largest monthly declines since the recession of the early 1980s. GDP fell 0.8%, adding significant downward momentum to the already-weak economy.

In September, the output of manufacturing industries was down 2.1%, the largest monthly decline since the January 1998 ice storm. The weakness in manufacturing affected nearly every sector; 18 of 21 manufacturing groups, representing more than three-quarters of total output, reported declines.

Finally, the seasonally adjusted current account surplus fell $3.5 billion to $5.5 billion in the third quarter. Energy price declines were the major factor in the $4.2 billion drop in the goods surplus to $12.8 billion.

In Europe, stocks are mixed. There’s some positive feeling there on news that European inflation has slowed to its lowest level in 18 months in November, giving the European Central Bank room to cut rates.

The FTSE is down 26 points to 5,182. The CAC 40 is up 51 points though to 4,496. The DAX has added 80 points to 5,016.

Overnight in Asia, stocks also rallied. The Nikkei gained 41 points to 10,697. The Hang Seng rose 189 points to 11,279.

In M&A news, Cable & Wireless plc is buying the assets of bankrupt Exodus Communications Inc. for US$850 million to boost its U.S online business.

Rothmans Inc. is raising its offer for Santa Fe Natural Tobacco Company, Inc. which increases the total value to US$353.7 million for Santa Fe’s shareholders to respond to a counter-offer from R.J. Reynolds.

Rothmans says it decided to increase its offer for Santa Fe based on the additional due diligence it has undertaken since signing the merger agreement with Santa Fe on September 27 and in light of continued strength in Santa Fe’s financial results. The revised terms of the Rothmans offer increases the cash payable from US$105 million to US$162 million.

In earnings news, The Forzani Group Ltd. reported its results for the third quarter. Net earnings were $5.6 million, a year-over-year increase of 74.3%.