North American markets appear headed for another dismal day of trading Thursday as overseas stocks fell on credit worries and the U.S. government reported a larger-than-expected trade deficit.

The U.S. trade deficit swelled to US$62.2 billion in July, its widest gap in 16 months, as the price of imported oil surged to another record.

Wall Street economists had estimated estimated a $58.80 billion shortfall for July.

Separately, the U.S. Labour Department said itial claims for jobless benefits fell 6,000 to a seasonally adjusted 445,000 in the week ended September 6.

Economists surveyed by Dow Jones Newswires had expected claims would fall by 4,000.

Here at home, Canada’s trade surplus with the world declined to $4.9 billion in July from $5.6 billion in June, as the growth in imports surpassed the growth in exports.

Separately, StatsCan reported that the rate of increase in new housing prices continued to ease in July for the sixth consecutive month.

Nationally, contractors’ selling prices rose 2.7% between July 2007 and July 2008, a slower pace than the year-over-year increase of 3.5% in June.

On a monthly basis, prices rose 0.1% between June and July.

The Canadian dollar opened at US93.13¢, down 0.35 of a cent from Wednesday’s close.

Oil futures fell 88¢ to US$101.70 a barrel in electronic trading on the New York Mercantile Exchange, despite concerns about Hurricane Ike’s potential to harm refinery operations in the Gulf of Mexico, falling U.S. crude inventories and an OPEC decision to cut production by 500,000 barrels a day.

Bank stocks led a broad selloff in Asia as the troubles at Wall Street investment bank Lehman Brothers fanned fears of more credit-market losses and drove down financial company shares across the region.

The Japanese Nikkei 225 closed down 1.98%. to 12,102.50.

In Hong Kong, the Hang Seng Index shed 3.1% to 19,388.72.

European indexes were all down more than 1% in midday trading.

Toronto stocks surged on Wednesday, after a week-long slide, in a broad rally led by resource and banking shares.

The S&P/TSX composite index jumped 350.39 points, or 2.88%, to finish at 12,497.15.

Bargain huniting didn’t spill over to small-cap stocks. The junior S&P/TSX Venture composite index fell 24.53 points, or 1.51%, to end at 1,596.73.

In New York, the Dow Jones industrial average was up 38.19 points, or 0.34%, at 11,268.92. The S&P 500 was up 7.53 points, or 0.61%, at 1,232.04. The Nasdaq composite index was up 18.89 points, or 0.85%, at 2,228.70.