North American markets may open flat Tuesday as investors await the U.S. Federal Reserve’s decision on interest rates.

The Fed is expected to raise a key short-term interest rate by another quarter percentage point to 2.75%, when it issues its decision at 2:15 p.m. ET.

In other economic news, Canadian consumers went on a buying spree in January, Statistics Canada said today. Retail sales bounced back 2.0% in January to $29.8 billion, after falling 1.2% in December and remaining essentially flat in November.

StatsCan said January’s results brought retail sales back in line with the strong upward trend observed since the start of 2004.

The government agency said shopper increased their spending in all sectors in January.

South of the border, surging energy costs pushed up U.S. wholesale prices in February, but the core rate of inflation barely budged.

The producer price index for finished goods rose at a seasonally adjusted 0.4% in February after it increased 0.3% in January, the U.S. Labor Department said today. Energy prices jumped 1.4% following a 1% drop in January, while food prices advanced 0.8% after a 0.2% decrease in January.

The core index of producer prices, which excludes the volatile food and energy components, inched up 0.1%. The core surged 0.8% in January.

Crude oil futures eased Tuesday after Saudi Arabia’s oil minister said OPEC was mulling another output increase of half a million barrels daily. Light, sweet crude for May delivery fell 28¢ to US$57.18 per barrel in electronic trading on the New York Mercantile Exchange by late morning in Europe.

North American stock markets ended with moderate losses Monday as investors awaited an expected interest rate hike in the U.S., gold futures plunged, and Nortel disappointed.

The S&P/TSX composite index lost 61.14 point, or 0.63%, to end the day at 9,693.55. Volume was 210 million shares.

Losses on the TSX were broadly based with every sector but real estate losing ground.

The biggest decline was in the gold sub-index, which fell 2.3% as gold futures tumbled $8.20 to US$431.10 an ounce.

Gold fell as the U.S. dollar strengthened on world currency markets. The Canadian dollar ended with a loss of more than half a cent (0.55¢) to US82.61¢.

Gold fell ahead of tomorrow’s decision on interest rates by he U.S. Federal Reserve. The Fed is expected to hike its key overnight interest rate by a quarter of a percentage point to 2.75% tomorrow afternoon.

The TSX information technology group fell 1.5%, largely because of weakness in Nortel. Its shares fell 19¢ to $3.40 after it turned in third-quarter financial results that came up short of analysts’ estimates in both the top and bottom lines.

The junior S&P/TSX Venture composite index 22.03 points, or 1.10%, to 1,978.77. Volume was 148 million shares.

On Wall Street, the Dow Jones industrial average dropped 64.28 points, or 0.60%, to 10,565.39.

The tech-heavy Nasdaq composite index lost a fraction of a point to close at 2,007.50.

The broader S&P 500 slipped 5.87 points, or 0.49%, to end at 1,183.78.