North American stock markets are expected to advance Tuesday morning, helped by better-than-expected data on U.S. retail sales and manufacturing activity.

U.S. retail sales decreased a seasonally adjusted 0.3% — the weakest showing in five months — after rising a revised 1.2% in December, the U.S. Commerce Department said today.

A 3.3% decline in demand for motor vehicles and parts pushed overall sales lower. Car sales had raced up 4% in December.

Sales excluding the volatile autos category rose 0.6%, with healthy demand for apparel and general merchandise leading the way.

Economists were looking for a 0.4% overall decline in sales, and a rise of just 0.4% in sales excluding autos.

Separately, manufacturing activity in the New York Federal Reserve district slipped to a reading of 19.19 in February compared with an unrevised 20.08 in January. February marked the 22nd straight month of positive readings. Economists expected a steeper drop to 18.2.

The U.S. Commerce Department is slated to release a report on business inventories for December at 10:00 ET. Economists expect inventories to rise by 0.3%.

There are no major economic releases from Statistics Canada today.

In today’s earnings news, Inco said it had its best fourth-quarter and full-year profits since 1989 as nickel prices soared. Fourth-quarter net earnings to US$251 million US, or $US1.19 per diluted share. Quarterly sales were $1.16 billion, up from $832 million in the previous year.

Rogers Communications reported a quarterly loss of $15.5 million, or 12¢ per diluted share, compared to a profit of $68.84 million, or 23¢ per diluted share, in the same period a year earlier.

Toronto stocks rebounded from earlier losses to close higher Monday. The S&P/TSX composite index ended up 26.72 points, or 0.28%, to 9,585.22. Volume was 313 million shares.

The junior S&P/TSX Venture composite index edged up 0.72 of a point to end the day at 1,888.15.

U.S. stocks ended little changed on Monday, as a 4.2% rise in Apple Computer helped lift tech stocks, but insurer American International Group limited the Dow’s advances.

AIG fell $2.03 to US$71.09 after it said it received new subpoenas from New York Attorney General Eliot Spitzer and the U.S. Securities and Exchange Commission related to insurance products that might have helped companies smooth earnings.

At close, the Dow Jones industrial average was down 4.88 points, or 0.05%, at 10,791.13 and the S&P 500 Index was up just 0.84 of a point, or 0.07%, at 1,206.14. The tech-heavy Nasdaq Composite Index was up 6.25 points, or 0.30%, at 2,082.91.