North American markets are expected to advance Tuesday morning, lifted by strong quarterly earnings from investment banks Bear Stearns and Morgan Stanley.

Morgan Stanley said net income rose 18% to $1.2 billion for the fourth quarter, thanks to record results at its fixed-income and Discover Card businesses, and robust investment-banking activity. Net revenue was up 7% to US$5.45 billion.

Bear Stearns reported a 22% gain in four-quarter profit, boosted by a surge in investment-banking revenue. Bears Stearns earned US$2.61 a share, up from US$2.19 a share in the year-earlier period.

In other earnings news, ATI Technologies says its quarterly earnings rose 34% from a year earlier to US$63.7 million. Earnings for the first quarter ended Nov. 30 amounted to 25¢ a share and compared
with US$47.4 million or 19¢ per share a year ago.

In economic news, Statistics Canada reported that retail sales jumped 1.4% to a record high of $29.6 billion in October, mostly due to a rebound in auto sales and price-induced gains at gasoline stations.

Excluding sales by retailers in the automotive sector, retail sales were little changed in October, up just 0.1%, StatsCan said.

In a separate release, the government agency said the steady slowdown in the growth of the composite index of leading indicators that began in July culminated with the index posting no growth in November, the first time it has not risen since May 2003.

There are no major economic releases from the United States today.

In M&A news, home improvement retailer Rona Inc. is paying $100 million cash for Totem Building Supplies Ltd. of Alberta, a privately held firm with 16 stores.

Toronto stocks ended higher Monday as mining issues extended their recent rally. The S&P/TSX composite index rose 54.32 points, or 0.6%, to close at 9,176.94. Volume was moderate at 222 million shares.

The junior S&P/TSX Venture composite index edged down 1.72 points to 1,736.91.

In New York, stocks finished mixed as lower oil prices eased concern about high energy costs cutting into corporate profits, while technology shares eased slightly.

The Dow was up 11.68 points, or 0.11%, to close at 10,661.60 and the S&P 500 was up 0.46 of a point, or 0.04%, to finish at 1,194.66.

The Nasdaq composite index was down 7.35 points, or 0.34%, to end at 2,127.85.