North American stocks are likely to open lower Tuesday despite a smaller than expected drop in U.S. housing starts, while Canada’s inflation rate was steady.

Statistics Canada reported the annual inflation rate was at 2.2% in May, unchanged from April.

The Canadian dollar opened at US93.49¢, up 0.17 of a cent.

South of the border, U.S. housing starts fell for the first time in four months during May, but building permits swung up, a promising sign for future construction.

Starts decreased 2.1% to a seasonally adjusted 1.474 million annual rate, after rising by 1.0% in April to 1.506 million, the U.S. Commerce Department said Tuesday. Originally, April starts were seen increasing by 2.5% to 1.528 million.

Economists had forecast a 3.5% drop to a 1.474 million annual rate.

In business news, Yahoo named co-founder Jerry Yang as chief executive, replacing Terry Semel. Yahoo announced the changes after the 4 p.m. market close yesterday.

Expedia said it would buy back US$3.5 billion of its own stock in a tender offer at between US$27.50 and US$30 a share.

In today’s earnings news, Best Buy’s profit fell 18% in its fiscal first quarter as increased sales of notebook computers and videogame hardware hurt margins.

Bayer lifted its earnings forecast for 2007 and 2009,


In M&A news, Dutch bank ING agreed to buy Turkey’s Oyak Bank for US$2.67 billion.

Crude-oil futures lost ground on Tuesday, but hovered near the US$69 mark, falling 14¢ to US$68.95 a barrel.

Overseas, the Nikkei closed with a modest rise in Tokyo while the FTSE 100 in London was down slightly.

Toronto stocks ended higher for a fourth straight session on Monday as shares of oil and gas companies got a boost from oil prices.

The S&P/TSX composite index gained up 39.01 points, or 0.3%, to finish at 14,176.42, a record closing high.

Overall, six of the 10 TSX 10 main groups were higher, led by a 0.7% jump in both the energy sector and the resource-laden materials sector.

The junior S&P/TSX Venture composite index gained 23.31 points, or 0.73%, to close at 3,226.18.

In New York, U.S. stocks slipped as rising oil prices took their toll on energy-dependent sectors.

The Dow Jones industrial average was down 23.81 points, or 0.17%, at 13,615.67. The S&P 500 ndex was down 1.78 points, or 0.12%, at 1,531.13. The Nasdaq composite index was down 0.11 point at 2,626.60.