By James Langton

(July 27 – 09:00 ET) – The U.S. Employment Cost Index, released this morning, was expected to rise by 1%, and it did. Yet traders still blanched at the numbers, putting some initial selling pressure on futures, before recovering. It was also announced that jobless claims fell 40,000 last week.

In Canada, Industrial Product Prices for June were reported up 5.5% compared with June 1999. This was down slightly from year-over-year increases of 5.7% in May and 6.1% in February, the most recent peak. Energy costs continued to exert upward pressure on the prices that manufacturers received for their products, as well as what they paid for their raw materials.

Roughly half of June’s year-over-year rise was the result of a 52% increase in prices for petroleum and coal products. If the impact of these prices were excluded, June’s advance in industrial product prices would have been 2.7% instead of 5.5%.

StatsCan also reported that employees earned an additional $1.99 per week in May. Average weekly earnings were estimated up 2.6% from May 1999. Weekly earnings gains were mostly in goods-producing industries, especially logging, mining and manufacturing. Neither of the Canadian numbers is expected to outweigh moves in the U.S. and a focus on earnings.

In Europe stocks are mixed and modestly changed, with telecoms and networkers down, but drugs and oils up. The FTSE is up 20 points to 6,407. The CAC 40 has gained 40 points to 6,532. The DAX is down 31 points to 7,270.

Phone giant Nokia Oyj is leading the way down after saying third quarter earnings will fall. Earnings at Deutsche Telekom AG and British Telecommunications plc both fell.

Internet stocks are in the spotlight as analysts across Wall Street downgrade Amazon.com Inc. after its second-quarter sales were below forecasts and its losses more than doubled.

In Asia stocks followed Wall Street down. The Nikkei dropped 321 points to 16,182. The Hang Seng closed off 170 points to 17,450.

In Canadian earnings news, net profit at TrizecHahn Corp. sank to 11¢ a share, from 23¢ in the period last year. Co-Steel Inc. reported net earnings of 67¢ a share, up from 20¢ in the period last year. Potash Corp. reported net income of $1.15 a share, up from $1.14 in 1999. Biovail Corporation is reporting net income of 31¢ a share, up from 21¢ per share in 1999. Last but not least, Repap Enterprises Inc. reported net income of $600,000 in the second quarter, compared to a loss of $12.5 million in the first quarter of 2000 and a loss of $13.5 million in the second quarter of 1999.

In other news, Celestica Inc. announced today that it has priced its US$750 million offering of 20-year Liquid Yield Option Notes at $475.66 each, with a yield to maturity of 3.75%, convertible into 5.6748 subordinate voting shares. Celestica intends to use the proceeds for capital expenditures, working capital and general corporate purposes, including future acquisitions.