Stocks look like they will open down this morning, as traders take some profits from last week’s large closing rally, although it was on thin holiday volume.

As well, negative sentiment is building on news that drug giant Merck & Co. reported it has booked US$14.1 billion in revenue that it didn’t receive. Also, AOL’s bond rating has dropped to junk levels.

On the bright side, Level 3 Communications Inc. got a US$500 million cash infusion from Berkshire Hathaway Inc. and two other investors which is creating interest in the firm.

In Europe, stocks are down, driven by the Merck news. Accounting worries have generally taken hold. The FTSE is down 35 points to 4581. The CAC 40 dropped 15 points to 3848. The DAX is down 53 points to 4430.

Asian markets also traded modestly down earlier today. The Nikkei shed 57 points to 10769. The Hang Seng lost just three points to 10803.

In M&A news, EBay Inc. is buying PayPal Inc. for about US$1.5 billion.

Finally, Hummingbird Ltd. says that it expects sales for the third quarter will be in the range of US$43 to US$44 million. Those numbers represent a slide of 5% to 7% compared to the previous quarter and the net loss per share is expected to be in the range of 9¢US and 11¢US.