Stocks look set to fall on the open this morning in the wake of a brutal U.S. jobs report.

Tech stocks may hold up a little better as the semiconductor sector looks stronger after Intel Corp. affirmed its third-quarter sales guidance.

The United States jobs report is the big news, though. The U.S. unemployment rate jumped to a four-year high of 4.9% in August from 4.5% in July.

Payrolls fell by 113,000, more than double the number most economists were expecting. The report raises the spectre of a deeper and longer slowdown in the U.S. than many were expecting, it also likely cements further cuts to U.S. interest rates.

In Canada, our jobs report showed 8,000 job losses in August, the third consecutive month of small declines. This brings job losses since May to 35,000.

The drop in employment combined with an increase in labour force participation pushed the unemployment rate up 0.2% in August to 7.2%. But the fundamentals of these losses aren’t that bad.

In August, full-time employment actually rose by 41,000, while part-time fell by 49,000. The employment declines over the last three months were concentrated in service-producing industries, notably professional, scientific and technical services.

In Europe, stocks are weak once again, even without the U.S. gloom. Telecoms such as Nokia Oyj are leading the way down on profit worries.

Swiss Reinsurance Co. is weak among the financials after it reported that its first-half profit fell 55%. Also, German industrial production was reported down for July, its first slide in three months.

The FTSE dropped 69 points to 5,135. The CAC 40 is off another 43 points to 4,438. The DAX is down 61 ticks to 4,814.

Overnight the Asian markets didn’t offer any relief either. It was reported that Japan’s economy contracted 0.8% in the second quarter, the biggest drop since the last recession in 1999. The Nikkei is down 134 points to 10,517. The Hang Seng chopped 280 points to 10,384.

In M&A news, Asahi Bank Ltd. and Daiwa Bank Ltd. are said to be in talks to merge.

The Thomson Corp. says that it has sold its 50% interest in the Augusta Newsprint Company to The Woodbridge Company Limited, the holding company of the Thomson family, for US$190 million.

Corel Corporation says it has amended its financials for the year ended Nov. 30, 2000. The company has restated its balance sheets for the years ended November 30, 1996 through November 30, 1999 to remove the contingent liability related to the Novell royalty obligation.

Corel concluded that the accounting treatment and disclosure previously adopted was not appropriate, but it says this restatement has no impact on its previously reported results of operations or overall cash flows.