Stocks may extend yesterday’s declines into Tuesday. North American stocks dropped again Monday, as the falling commodity prices continued to waylay the Toronto market, and as worries over inflation, interest rates and a general slowdown in the U.S. economy depressed American markets.

The S&P/TSX composite index fell 193.12 points, or 1.70%, to 11,197.58, its lowest level for 2006, and putting the index in negative territory for the year.

In Tuesday’s economic news, U.S. wholesale prices rose just 0.2% in May thanks to falling food prices. The U.S. Labor Department said the “core” number climbed 0.3%, more than expected, suggesting energy prices are leading to cost pressures throughout the production pipeline.

Separately, U.S. retail sales rose just slightly during May, suggesting the economy is weakening as demand tumbled for cars and such home improvement goods as furniture and building materials.

The Canadian dollar opened at US90.42¢, down 0.63 of a cent. On Monday, the loonie closed above US91¢ for the first time since 1978.

In today’s earnings news, Goldman Sachs reported quarterly earnings of US$2.31 billion as revenue in investment banking jumped 87%.

In M&A news, Bank of Nova Scotia has struck a deal to acquire the parent firm of Costa Rica’s largest private bank, for $330 million. Scotiabank said Tuesday it will acquire Corporacion Interfin and merge its existing subsidiary in the Central American country with Interfin, resulting in a 13% loan market share.

In overnight trading, Japan’s stock market plunged four 4% Tuesday, its biggest one-day loss in two years. The Nikkei 225 index fell 614.41 points, or 4.14%, to finish at 14,218.6 points, the lowest close since Nov. 16, 2005. It was the Nikkei’s biggest percentage loss in a single day since May 10, 2004.

Hong Kong’s blue-chip Hang Seng Index fell 387.02 points, or 2.5%, to 15,234.42 points.

In Toronto, the resource heavy S&P/TSX Venture composite index plunged 105.45 points on Monday, or 3.97%, to 2,549.03.

In New York, the Dow Jones industrial average closed down 99.34 points to 10,792.58. The Nasdaq composite index fell 43.74 points to 2,091.32, its lowest level in about eight months. The S&P 500 Index dipped 15.90 points to 1,236.40.