Toronto stocks could slide Wednesday, on day after the federal government announced it will impose a tax on income trusts.

After markets closed Tuesday, Finance minister Jim Flaherty announced the new rules designed to curb conversions into income trusts, putting in doubt such plans by Telus Corp. and BCE Inc.

BCE said early Wednesday it will evaluate its options in the wake of Flaherty’s restrictions and retirement home operator Extendicare Inc. said its will delay its conversion plan.

Analysts suggest trusts could fall as much as 20%.

The Canadian dollar opened at US88.43¢, down 0.61 of a cent.

Meanwhile, U.S. stocks are set to rise at the after Time Warner reported a surge in earnings/

Time Warner’s third-quarter profit nearly tripled, helped by gains from asset sales and strong results in cable services. The media company also reaffirmed its 2006 full-year business outlook. Revenue rose 6.5% to US$10.91 billion.

The Institute of Supply Management’s manufacturing survey for October is due to be released later this morning. Economists expect the ISM survey to rise to 53.2% from 52.9% last month. A figure above 50 indicates economic expansion.

Data on September construction spending and pending U.S. home sales also are expected. All three reports are slated for release at 10:00 ET.

Auto makers will be releasing monthly sales results throughout the day. They are expected to show an improvement in October U.S. sales compared to the same month a year ago.

In earnings news, Germany’s Deutsche Bank said its third-quarter net profit rose 25% from a year earlier, on robust growth in the group’s fixed-income business as well as extraordinary gains.

Crude-oil futures slipped 23¢ at US$58.50 a barrel ahead of data expected to show rising U.S. crude-oil stocks but falling gasoline and distillate inventories.

Overseas, London’s FTSE 100 rose 0.2% in London and the German DAX was virtually flat.

Tokyo’s benchmark Nikkei 225 index fell 24.13 points, or 0.15%, to finish at 16,375.26 points on the Tokyo Stock Exchange.

In Hong Kong, the blue-chip Hang Seng Index rose 129.3 points, or 0.7%, to close at a record 18,453.65.

Toronto stocks moved higher Tuesday, spurred forward by a strong day in resource stocks, particularly gold issues.

The S&P/TSX composite index gained 70.19 points, or 0.57%, to 12,344.59.

The S&P/TSX Venture composite index was up 0.66%.

In New York, markets were little changed on the session, ending an otherwise strong month.

The Dow Jones Industrial Average fell 5.77 points to 12,080.73, the Nasdaq Composite Index rose 2.94 points to 2,366.71, while the S&P 500 Index ended essentially flat, up just 0.01 of a point at 1,377.94.

For the month of October, the Dow Jones gained 3.4%, the Nasdaq moved up 4.8%, and the S&P500 gained 3.2%.