North American stocks are set to open lower Tuesday after profit warnings in the U.S. retail sector.

Meanwhile, Federal Reserve Chairman Ben Bernanke said the U.S. economy is poised for growth.

Despite an “ongoing” drag from the housing sector, the U.S. economy should expand at a moderate pace near its underlying potential in coming months as other factors limiting growth reverse, Bernanke said. Bernanke spoke via satellite at a South African conference on housing and the economy.

Bed Bath & Beyond issued first-ever profit warning as a public company. Cache issued its own warning, saying second-quarter earnings would miss an earlier forecast due to a 2% decline in same-store sales in May.

On the data front, the U.S. Institute of Supply Management’s nonmanufacturing index is expected to modestly decline in May.

There are no major economic releases from Statistics Canada today.

The Canadian dollar opened at US94.37¢, off from Monday’s close of 94.48 cents, which was up 0.26 cent on the day.

In M&A news, Silver Lake and TPG’s TPG Capital last night agreed to purchase telecommunications-equipment company Avaya for about $US8.2 billion, marking the second big buyout in the telecom industry in two weeks.

In earnings news, Forzani Group reported a quarterly profit of $739,000, up from $294,000 a year ago, as sales rose to $294.6 million from $280.4 million. Forzani’s bottom line included a $900,000 one-time hit on an investment loss.

European budget airline Ryanair warned current year profits would rise just 5% after reporting a 42% advance in fiscal 2007 net income.

Crude-oil futures slipped 32¢ to US$65.89 a barrel in electronic trading.

Chinese stocks rebounded in volatile trading Tuesday following their sharpest one-day drop in three months. The Shanghai Composite rose 2.6% after a roller-coaster session that saw the index plunge as much as 7.2% earlier in the day.

The Nikkei 225 rose 0.5% in Tokyo, and the FTSE 100 rose 0.2% in London.

Toronto stocks moved higher Monday, as a strong day in the resource sector overshadowed weakness in the financials group.

The S&P/TSX composite index gained 27.37 points, or 0.19%, to 14.146.74.

The S&P/TSX Venture composite index moved up 4.14 points, or 0.13%, to 3,279.01.

In New York, markets ended moderately higher as mergers and acquisition news overshadowed higher energy prices.

The Dow Jones industrial average gained 8.21 points, or 0.06%, to 13,676.32, the Nasdaq composite index gained 4.37, or 0.17%, to 2,618.29, and the S&P 500 index moved up 2.84, or 0.18%, to 1,539.18.