Stocks look set to open on the downside Friday, with some negative corporate news souring traders on stocks.

The shares of Honeywell International Inc. and Lucent Technologies Inc. are leading the way down after both firms cut their profit estimates. Along with falling sales, Lucent said that it will also have to impose more job cuts.

The economic news is generally supportive for markets today, but traders aren’t paying much attention. The U.S. Producer Price Index came in flat for August on the headline, and down 0.1% on the core rate. With the lack of inflation, and possible risk of deflation, it was also reported that U.S. retail sales grew 0.8% in August. This was more than expected. Excluding autos, sales were up 0.4% in the month.

In Canada, it was reported that labour productivity in the business sector rose 0.9% in the second quarter. Productivity growth has now been positive for the last six quarters. Large increases in the last three quarters resulted in a year-over-year growth of 3% in the second quarter, similar to 2.9% in the first. These rates are well above any recorded since 2000 and are also above the average for the 1990s.

The growth in productivity has occurred along with strong output growth. Output in the business sector rose 1.3% in the second quarter, down from 1.9% in the first quarter. Employment rose 0.9%. However, hours worked only rose 0.5% in the second quarter compared with 0.8% in the first. The unit labour cost fell 0.2% in the second quarter.

In Europe, stocks are down pretty heavily this powered by some poor corporate news. France Telecom SA is down on news that its CEO has quit, it may sell off some assets and raise US$14.7 billion from new share sales. And, Allianz AG is down after it said that it will have to put US$750 million into its U.S. Fireman’s Fund Insurance Co. unit to cover asbestos-related claims.

The FTSE is down 157 points to 3,928. The CAC 40 has dropped 87 points to 3,155. The DAX has a 106 point slide on its hands, to 3,316.

Overnight in Asia, stock markets also closed the week on a down note. The Nikkei surrendered 173 points to 9,242. The Hang Seng shed 245 points to 9,651.

In M&A news, Vivendi Environnement SA is selling its equipment distribution business for US$620 million to a buyout team of JP Morgan and Thomas Lee.

In earnings news, Cedara Software reported a net loss of $0.4 million for the fourth quarter of fiscal 2002, compared with a net loss of $45.5 million in the same quarter last year. For fiscal 2002, it recorded net income of $1.5 million, compared to a net loss of $67.8 million last year.

GDI Global Data Inc. reported a net loss for its latest quarter was $810,339 compared to $1,853,301 last year.