LONDON (ShareCast) - Reports of further bid activity in the mining sector is set to give Wall Street a kick-start in opening deals despite a wider trade deficit.

Press talk in the UK suggested aluminium producer Alcoa could be the latest takeover target in a report that named BHP Billiton as Rio Tinto separate bidders. The report said the pair could both be willing to pay up to $40bn.

Post-it Note and Scotch tape maker 3M is set to move higher in early dealings after it confirmed a new $7bn share buyback program

PC manufacturer Hewlett-Packard is also expected to gain ground after positive comment from Banc of America. The broker lifted 2007 and 2008 earnings estimates and hiked its price target to $47 from $44.

Insurance broker Marsh & McLennan said fourth quarter earnings soared to $226m compared with $35m a share a year ago, on the back of growth in its consulting business. Marsh recently sold its Putnam asset management arm for $3.9bn.

At the opening bell the Dow Jones is expected to jump about 34 points while the Nasdaq 100 is set to rise by around 3 points. Early S&P 500 futures indicate a 2 point decline at the start.

The Commerce Department said the US trade deficit widened by a bigger than expected 5.3% to $61.2bn in December, taking the trade gap to an all time high for the fifth consecutive year. The 2006 annual trade gap stands at $763.6bn.

General Motors is likely to be full steam ahead in opening deals after Merrill Lynch upgraded the shares to 'buy' from 'sell'. The broker said it was optimistic that GM would tackle its healthcare costs as it upped its target to $50.

Yum Brands, the fast food chain behind KFC and Pizza Hut, reported a better-than-expected rise in fourth quarter income overnight to $232m from $226m a year ago after it was hit by an E. coli outbreak linked to its Taco Bell restaurants.

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