North American markets posted small gains Tuesday as investors digested weak corporate and economic news. The S&P/TSX composite index gained 25.75 points to 6,488.18.

Before markets opened, the Bank of Canada raised interest
rates for the fifth time in a year, upping its key overnight rate to 3.25% from 3%, and pinning the decision on
inflation rates running well outside its targets.

Celestica dropped 55¢ to $14.10 – its lowest level since late 1998 – after the Canadian electronics manufacturer said its first-quarter profit plunged to $3.4 million US and the second quarter could produce a loss.

Air Canada shares fell 7¢ to $1.11. The chairman of Onex, Gerald Schwartz, said his company still intends to buy part of Air Canada’s frequent-flier program. The original $245 million deal had to be renegotiated when Air Canada filed for bankruptcy protection April 1st.

Shares in Onex were down 31¢ at $13.65.

Petro-Canada was fell 87¢ to $46.84, while Abitibi-Consolidated slipped 10¢ to $9.99 and Cambior gained 18¢ to $1.74.

Placer Dome rose 34¢ to $14.29 after saying it has begun the startup of the Turquoise Ridge gold mine in Nevada.

Software company Zi Corp. was ahead 8¢ to $2.68 after it said its loss more than doubled to $40.4 million in 2002, dragged down by litigation and settlement costs in patent infringement disputes.

Canadian National Railway climbed $1.51 to $66.96 after chief executive Hunter Harrison said he expects no growth in the first half of this year due to continued low grain shipments as a result of last year’s drought-shrivelled harvest on parts of the Canadian Prairies.

The TSX Venture Exchange edged 4.46 points lower to 1,037.9.

On the Toronto stock market, advances beat declines 579 to 456 with 241 unchanged. Volume was 169.9 million shares worth $2.02 billion.

In New York, the Dow Jones industrial average moved 51.26 points higher to 8,402.36. The Nasdaq composite index climbed 6.06 points to 1,391.01, while the S&P 500 index was up 5.60 at 890.83.

The widening spread between Canadian and U.S. interest rates helped push the loonie above 69¢ US for much of Tuesday before it settled back to close at US68.98¢.