Stocks are expected to open higher this morning on some strong earnings news in the U.S.

Amazon.com Inc. had its first quarterly profit ever in the fourth quarter. Bank of America Corp. saw its fourth-quarter profit rose 49%. Lucent Technologies Inc. saw its loss narrow, and sees a return to profits ahead, and Johnson & Johnson saw its profits rise by 18% to US$1.11 billion.

The only economic news is Canadian this morning. The Consumers Price Index came in at just 0.7% annually in December. The weak CPI is primarily due to a drop in energy prices, especially gasoline prices. For the 12-month period ending in December, the all-items excluding energy index rose 2.0%, its smallest increase in 2001.

The Monthly Survey of Manufacturing is also out, showing that shipments climbed 1.7% to $41.4 billion in November, as manufacturers regained some of the ground lost in September and October. Increases in the motor vehicle and aerospace product and parts industries led the way. Fifteen of 21 industries, representing 82% of total shipments, reported higher shipment values in November.

In Europe, stocks are rallying, driven by the earnings news. The FTSE is up 66 points to 5,204. The CAC 40 has gained 60 points to 4,483. The DAX is up by 49 points to 5,118.

Overnight in Asia, stocks traded before the good news and with a weaker yen. The Nikkei shed 229 points to 10,051. The Hang Seng dropped 203 points to 10,798.

In M&A news, Tyco International Ltd. says it will split into four companies and erase as much as US$11 billion in debt.

In other news, Alcan reports net income of US$73 million (US22¢ per share) before non-recurring items and foreign currency translation effects on operating cash flow of US$617 million; although the profit is erased by non-recurring after-tax charges of US$446 million.

Lorus Therapeutics Inc. says it incurred a loss of $3,683,00, compared to a loss of $3,806,000 for the second quarter last year.

Also, Bank of Montreal’s board has approved an increase in the dividend from 28¢ to 30¢ per share. This is the tenth increase since 1992.