Stocks look to open weaker Tuesday, following a softer than expected retail sales report in the United States. December retail sales came in up just 1.2% as demand for cars offset lackluster holiday spending. Excluding autos, sales were unchanged.

Stocks had been looking up prior to the release of the U.S. data, with traders bidding up firms such as Nortel, Lucent, Cisco and Intel after Alcatel SA beat its sales forecasts.

In Canada, it was reported that investment in non-residential building construction reached an all-time high in the fourth quarter, fuelled by spending in the public sector. Overall, businesses and governments spent $6.4 billion, up 1.2% from the third quarter.

Also weighing on the market are war worries between the U.S. and Iraq. Tensions heightened after UN chief weapons inspector Hans Blix suggested that his teams had uncovered some improper weapons imports into Iraq.

In other business news, insurance giant Travelers Property Casualty Corp. reported a loss after taking a US$1.3 billion charge, adding US$2.45 billion to its reserves for asbestos-related claims.

Stocks are mixed in Europe. Alcatel is driving higher after beating its numbers. Also, stronger industrial production numbers in France and the UK is boosting Renault SA and GKN plc. And, BP plc saw its profits slip, a development it blames on the strike in Venezuela.

The FTSE is down a point to 3,947. The CAC 40 is down less than a point at 3,169. The DAX has gained 34 points to 3,094.

Overnight in Asia, stocks were mixed. The Nikkei added 83 points to 8,553. In Hong Kong, the Hang Seng slid 38 points to 9,796.

And, in M&A news, Wal-Mart is said to be joining the battle for Safeway plc.

CGI Group Inc. reports that its takeover bid for Cognicase Inc. was successful, with approximately 90.2% of its shares tendeered to the bid.