Toronto was the only market in positive territory Tuesday morning, as New York markets continued to falter.

On Bay Street, the S&P/TSX composite index was up 7.35 points or 0.09% to 8479.53 at midday, after being up close to 20 points. The TSX Venture Exchange was down 3.9 points or 0.25% to 1558.15.

On Wall Street, the Dow Jones industrials was off 53.02 points 0.51% to 10318.45. The Dow tumbled nearly 45 points Monday. The Nasdaq was off 3.37 or 0.17% at 1971.01, while the S&P 500 index slipped 4.5 or 0.4% to 1125.80.

The Canadian dollar was up 0.27¢ to US73.57¢ on the latest indication that the Bank of Canada could move interest rates higher.

Energy prices pushed the year-over-year inflation rate up to 2.5% in May vs 1.6% in April, Statistics Canada reported. But excluding energy prices, the consumer price index was up just 1.3%, a slight increase from the 1.2% rise in both March and April. Even so, “core inflation remains slightly above what the Bank of Canada was calling for in the second quarter, so this latest mild reading on core by no means rules out rate hikes later this year,” said a commentary from BMO Nesbitt Burns.

In another report, a snapshot of how the Canadian economy is likely to perform in the months ahead ran up 1.2% in May. Statistics Canada said the boost in the leading indicator was the strongest gain since April 2002.

Financial stocks were leading the way on the TSX Tuesday morning, up 0.64%, with Scotiabank, (up 31¢ to $35.96), Manulife Financial (up52¢ to $53.73) and TD Bank (down 10¢ to $44.28) among the most active.

U.S. stocks were off despite strong earnings reports from brokerages Goldman Sachs and Morgan Stanley as stock traders remained fixated on the U.S. Federal Reserve and what it may do next week in raising interest rates from lows not seen in almost half a century.

Shares in financial services firm Morgan Stanley lost ground as the it doubled its second-quarter earnings to US$1.2 billion, while at Goldman Sachs, quarterly net income jumped 71% from a year ago to US$1.19 billion US — and its shares were down.

Overseas, Tokyo’s Nikkei average slipped 18.89 points to 11581.27. Markets were closed in Hong Kong and Taiwan for public holidays.

London’s FTSE 100 index backed off 39.4 points to 4462.8 just before the close. Frankfurt’s DAX 30 lost 1.6% and the Paris CAC 40 eased 1.12%.