North American stocks look likely to open mixed Wednesday, as traders consider a big merger in the music industry and await news from the Federal Reserve on interest rates.

Warner Music turned the tables Wednesday on EMI Group with a US$4.56 billion takeover bid, just after EMI said it boosted its own offer for Warner. EMI said it has improved its initial offer for Warner from US$28.50 a share to US$31, and the new EMI offer is entirely in cash.

The Fed begins a two-day meeting today to decide whether to boost the target on the fed-funds rate for the 17th straight time. Policy makers are widely expected to raise the rate by a quarter-percentage point to 5.25% and will issue their decision on Thursday.

Wendy’s said late Tuesday that second-quarter earnings per share will fall due to charges from its early-retirement plan, job cuts and other cost-cutting moves.

Crude-oil futures rose 10¢ to US$72.02 a barrel in early trading. Weekly inventory data are due later today, with traders anxiously awaiting the figures on gasoline in particular.

The Canadian dollar opened at US88.92¢, down 0.16 of a cent.

European stock markets were mixed, with the London FTSE 100 up 0.2% while the German DAX 30 dropped 0.3%.

In Japan, the benchmark Nikkei 225 index shed 285.7 points, or 1.88%, to 14,886.11 points on the Tokyo Stock Exchange. The index fell below 15,000 level for the first time since June 21, when it finished at 14,644.26.

In Hong Kong, The blue-chip Hang Seng Index fell 32.04 points, or 0.2%, to 15,742.66.

The Canadian dollar opened at 88.92¢, down 0.16 of a cent.

Toronto stocks fell back Tuesday, with the materials, information technology, and financial dragging the markets lower, despite an up tick in energy stocks.

The S&P/TSX composite index lost 78.30 points, or 0.69%, to 11,293.90.

Nine of the 10 TSX main sub-groups were down, with only the energy index, up 0.25%, in the black.

Crude for August delivery closed up 12¢ at US$71.92 a barrel on the New York Mercantile Exchange.

EnCana Corp. moved up 79¢, or 1.40%, to $57.40.

The materials index dropped 2.00% and the gold sub-sector fell 2.97%

Gold for August delivery ended down $3.30 at US$584.40 an ounce on the Nymex.

Bema Gold Corp. fell back 18¢, or 3.31%, to $5.26.

The financials sector fell off 0.63%. Scotiabank lost 14¢, or 0.31%, to $44.68.

Information technology moved 0.63% lower.

Research in Motion Inc. lost $1.65, or 2.20%, to $73.20.

The Canadian dollar closed up 0.01 of cent at US89.08¢.

The S&P/TSX Venture composite index was down 25.02 points, or 0.97%, to 2,549.18.

In New York, markets dropped in anticipation that the U.S. Federal Reserve would raise its key funds rate, maintaining a hawkish stance on inflation.

The Dow Jones industrial average fell 120.54 points to 10,924.74, its worst one-day drop since June 5. The Nasdaq composite index fell 33.42 points to 2,100.25, while the S&P 500 dropped 11.36 points to 1,239.20.