Stocks appear set rise at the open Monday as news of a major U.S. bank deal gives investors cause for optimism.

U.S. banking giant Wachovia Corp. is buying competitor SouthTrust Corp. in a deal valued at US$14.3 billion, the companies said today. The combination will create the largest bank in the southeastern U.S.

In other business news, Onex Corp. and Oaktree Capital Management are selling the Loews Cineplex Entertainment theatre chain to U.S. investors for $2 billion. Loews is the world’s third-largest cinema chain, with over 200 theatres and 2,200 screens worldwide.

Over the weekend, Alan Greenspan took the oath of office as chairman of the board of governors of the Federal Reserve System for a fifth four-year term commencing on June 20.

Asian stock markets closed mixed overnight, with prices rising in Tokyo on optimism about Japan’s economic recovery.

Tokyo’s Nikkei rose 218.08 points, or 1.92%, to 11,600.16 points.

In Hong Kong, the blue-chip Hang Seng Islipped 9.96 points, to 11,845.59. The index was pushed into negative territory on lingering concerns that China and the United States would raise interest rates soon to curb inflation in the two countries.

On Friday, the S&P/TSX composite index fell 29.55 to 8,468.01 today, while American markets rose.

The junior S&P/TSX Venture composite index added 21.28 points to 1,561.65.

American markets climbed despite a report from the U.S. Commerce Department the trade deficit swelled to an all-time high of U.S.$144.9 billion in the first quarter of this year. The figure was almost $5 billion more than economists expected.

The Dow Jones industrial average ended up 38.89 points at 10,416.41. The S&P 500 Index rose 2.95 points to 1,135.00. The tech-heavy Nasdaq composite Index closed up 3.06 points at 1,986.73.

For the week, the Dow edged up 0.06%, while the S&P 500 slid about 0.13% and the Nasdaq dropped 0.66%.