Stocks are expected to open sharply lower following U.S. President Bush’s toughly worded state of the union address on Tuesday night.

Index futures are pointing to a 100-point drop on Dow Jones industrial average just after the opening bell.

In his speech, Bush continued to build his case against Iraq. He said that U.S. Secretary of State Colin Powell will give evidence to the United Nations Feb. 5 of Iraq’s weapons concealment and ties to terrorists.

Bush also promised to revive the sputtering U.S. economy. He urged Congress to pass his proposed tax cuts, and also renewed his pitch for creation of a national energy policy.


Markets will also be looking ahead to a decision on U.S interest rates. The Federal Reserve Board is expected to keep U.S. interest rates unchanged at its meeting today. The Fed’s decision is due this afternoon.

In earnings news, Verizon Communications is reporting a profit in the latest quarter after revenue rose 1.2%.

Sony saw its third-quarter profit double on strong DVD and video sales.

BCE Inc. earned a net profit of $1.7 billion in the fourth quarter as a one-time gain from the sale if its directories business and tax gains helped the telcom giant offset writedowns on some assets and investments.

Statistics Canada is reporting that after hovering around 0.2% from August to November, the monthly growth rate of the composite leading indicator rose to 0.4% in December. This upturn was led by the firming of the stock market as well as strong domestic demand.

In other news, Bank of Canada governor David Dodge speaks on monetary policy in Toronto.

In Europe, stocks have fallen in morning trading as traders are preoccupied with war worries. The insurance sector is taking a drubbing. Paris’s CAC 40 index fell 55.99 points to 2,744.08. London’s FTSE 100 index is off 84 points at 3,406. In Frankfurt, the DAX has fallen 95.33 points to 2,576.03,

Asian-Pacific stocks finished sharply lower overnight, following President Bush’s hawkish message on Iraq. The Nikkei plummeted 194.31, or 2.28%, to 8,331.08, nearing a 20-year low.

In Hong Kong, the Hang Seng slipped 0.91% to 9,240.79.