North American stocks are set to trade higher at the open Tuesday, boosted by better-than-expected earnings from International Business Machines. Here at home, the Bank of Canada raised its overnight target rate by 25 basis points to 3%.

The increase was widely expected by market watchers.

IBM reported declining revenue and net income for the third quarter after the bell Monday, but the firm showed improved profitability in its closely watched services arm, which represents the lion’s share of IBM’s revenue.

In other economic news, Canadians continued to invest heavily in foreign securities, purchasing $5.5 billion worth in August, Statistics Canada said. Most of the investment poured into foreign bonds, as a record amount was purchased. Foreign holdings of Canadian securities dropped by $2.7 billion in August — the largest divestment in 18 months.

Separately, StatsCan the composite leading indicator posted a 0.3% increase in September, matching the gain in August. The government agency said last months’ increase was driven by strong domestic demand.

South of the border, U.S. wholesale prices surged at their fastest rate in 15 years during September, while costs excluding the soaring energy component grew more than expected.

The producer-price index for finished goods rose 1.9% on a seasonally adjusted basis last month after a 0.6% increase in August, the U.S. Labor Department said today.

In the 12 months ending in September, prices climbed 6.9% on an unadjusted basis. The year-over-year climb in August was 5.1%.

The core index, which excludes food and energy items, rose 0.3%, seasonally adjusted. It was unchanged in August.

Economists had called for a 1.4% jump in the overall index and a 0.2% increase in the core index.

Crude-oil prices slipped 8¢ to US$63.54 a barrel in early trading Tuesday.

Another busy session of earnings releases includes Johnson & Johnson and Merrill Lynch, with Intel, Yahoo and Motorola coming after the close.

In other business news, Refco said an investment consortium led by private-equity fund J.C. Flowers reached an agreement late last night to acquire Refco’s key regulated futures-trading unit as the brokerage firm filed for bankruptcy-court protection.

The Canadian dollar opened Tuesday at US84.46¢, down 0.35 of a cent.

Overseas, Japan’s Nikkei 225 ended 0.4% lower at 13352.24. European stock markets edged higher amid a flurry of health-care sector news, with London’s FTSE 100 climbing 0.2% recently.

Toronto stocks were up Monday, fuelled primarily by resource stocks and the technology sector.

The S&P/TSX composite index finished up 64.67, or 0.62%, to finish 10,553.44.

Nortel Networks announced that Bill Owens will step down as president and CEO to be replaced by Mike Zafirovski, who had been with Motorola Inc. until leaving in January. Shares in the company jumped 21¢, or 5.40%, to $4.10.

Research in Motion climbed $1.02, or 1.3%, to $76.93 on news it had signed a deal with Palm Inc. to offer RIM’s BlackBerry wireless e-mail service over Palm’s Treo 650 smartphone.

The junior S&P/TSX Venture composite index finished up 5.25, or 0.26%, to 2,063.15.

In New York, markets were up as tobacco company Altria Group Inc. received a favourable court ruling that could see it save billions and as General Motors announced a deal with its union to cut health-care costs.

The Dow Jones industrial average gained 60.76 points, or 0.59%, to 10,348.10, the S&P 500 index rose 3.53, or 0.30%, to 1,190.10 and the Nasdaq composite index added 5.47, or 0.26%, to 2,070.30.