North American stocks are pointing to a third straight day of losses Monday morning as traders fret over inflation and interest rates and commodity prices decline.

In today’s economic news, Statistics Canada said manufacturing activity picked up in March, with wide ranging gains led by a surge in aerospace production and a rebound in shipments of petroleum products.

Following a rather lacklustre start to the year, shipments rose 1.6% to $51.4 billion in March, the first increase so far in 2006. Meanwhile, the trend for shipments remained stable, although it has weakened in recent months.

Separately, StatsCan said new motor vehicle sales gained 1.1% in March, contributing to solid first quarter results in 2006.

The results for the first quarter of 2006 came in 2.0% ahead of the first quarter of 2005. A total of 138,659 new vehicles left dealer lots in March, an increase of over 1,500 vehicles compared to February. This was the strongest sales level since the incentive induced peaks of last summer, the government agency said.

The Canadian dollar fell sharply, opening at US89.49¢, down 0.65 of a cent.

Crude oil futures sagged as markets reacted to a lower demand growth forecast from the International Energy Agency.

Light sweet crude for June delivery fell $1.64 to US$70.40 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. That follows a drop of $1.42 on Friday.

Over the weekend, nickel miner Inco raised its cash-and-stock offer to acquire cross-town nickel rival Falconbridge by about $1.9 billion to about $19 billion over the weekend.

Most European and Asian stock markets declined on Monday, though European markets were well off the day’s low point.

Stocks in Japan fell for a fifth day as the dollar fell below 110 yen, the lowest in eight months, prompting investors to sell export shares like automakers and electronics companies.

Tokyo’s Nikkei 225 index declined 114.87 points, or 0.69%, to 16,486.91 points.

On Friday, the main index of the Toronto Stock Exchange recorded its second straight day of triple-digit losses as investors fled resource stocks.

The S&P/TSX composite index ended the trading day down 127.36 points, or 1.05%, at 12,038.07.

The main index fell 2% over two sessions and is down 1.9% on the week.

The junior S&P/TSX Venture composite index fell 66.63 points, or 2.02%, to 3,225.86.

The Canadian dollar lost more than six-tenths of a cent to finish at US90.14¢ as the Canadian trade surplus came in a little smaller than expected.

U.S. stocks fell for a second straight day on Friday.

The Dow Jones industrial average tumbled 119.74 points, or 1.04%, to close at 11,380.99.

The Nasdaq composite index dropped 28.92 points, or 1.27%, to 2.243.78.

The S&P 500 slid 14.68 points, or 1.12%, to 1,291.24.

The Nasdaq registered its worst weekly loss in 13 months, while the Dow snapped a five-week winning streak, its longest in six months.

For the week, the Dow fell 1.7%, the Nasdaq dropped 4.2%, and the S&P 500 lost 2.6%.