Stock futures headed higher Wednesday on hopes the U.S. Federal Reserve might step in to alleviate the pains of the credit crunch.

North American stocks tumbled on Tuesday as investors who expected an aggressive U.S. interest rate cut were disappointed by a more modest move.

The Fed cut the key fed funds rate by 25 basis points to 4.25%. Traders had fully priced in the quarter point cut but had been hoping for a half point decline in rates.

In today’s economic news, the continued strength of the Canadian dollar in October spurred significant volume increases and price declines for both international merchandise imports and exports.

Statistics Canada reported today that imports declined 2% to $34 billion, while exports edged down 0.5% to $37.4 billion, the third consecutive monthly decrease.

As a result, Canada’s trade surplus with the world expanded to $3.3 billion in October, up from a revised $2.8 billion in September, which was the lowest level since February 1999.

The Canadian dollar opened at US98.78¢, up one-fifth of a cent after falling more than four-fifths of a cent Tuesday.

South of the border, the U.S. trade deficit expanded by 1.2% to US$57.82 billion in October, higher than expected as the average price for imported oil soared to a record.

In earnings news, EnCana Corp. said it plans to double its dividend in 2008 and raise annual capital spending by 13% to US$6.9 billion, though Alberta investments will be curbed.

In M&A news, Petro-Canada is paying US$1.72 billion to buy out hedging contracts on its share of production from the Buzzard field in the British North Sea. Petro-Canada, which owns 29.9% of Buzzard, said Wednesday it is closing out the hedged portion of its Buzzard production from the start of 2008 through 2010, repurchasing contracts representing 30.7 million barrels of Brent crude at US$85.79 per barrel.

Crude-oil futures rose 75¢ to US$90.77 a barrel.

Overseas, the Nikkei 225 slipped 0.7% in Tokyo, while the FTSE 100 declined 0.7% in London.

In Toronto, the S&P/TSX composite index was down 216.65 points, or 1.55%, to close at 13,723.71 on Tuesday.

The junior S&P/TSX Venture composite index fell 26.20 points, or 0.95%, to end at 2,725.07.

In New York, stocks sank after the Fed trimmed interest rates rather than slashing them.

The Dow Jones industrial average slid 294.26 points, or 2.14%, to end at 13,432.77. The S&P 500 dropped 38.31 points, or 2.53%, to 1,477.65. The tech-heavy Nasdaq composite index lost 66.60 points, or 2.45%, to 2,652.35.