North American stocks look likely to open higher Thursday supported by modest gains in U.S. housing starts and benign initial jobless claims report.

May housing starts increased 0.2% to a seasonally adjusted 2.009 million annual rate, the U.S. Commerce Department said today. April starts rose a revised 9.4% to 2.005 million; originally, construction that month was seen going up 11.0%. Economists had called for a modest 0.6% increase in the starts last month.

Separately, the U.S. Labor Department said initial jobless claims rose by 1,000 to a seasonally adjusted 333,000 in the week that ended June 11, rebounding from a steep decline in the previous week.

Later today, the Federal Reserve Bank of Philadelphia will release its business-outlook survey of district manufacturers for June at noon. Economists look for a modest increase to a reading of 10.0.

Here at home, Statistics Canada said rising revenues in the wake of strong economic growth pushed the consolidated surplus for all Canadian governments to its highest level in four years during the 2004/05 fiscal year.

The agency said Canada’s federal, provincial, territorial, and local governments, as well as the two major pension plans, recorded a combined surplus of $12.1 billion.

Separately, StatsCan announced that foreign investment in Canadian securities was nominal in April as non-residents purchased $230 million worth over the month. Meanwhile, Canadian investors continued to invest heavily in foreign securities, acquiring $2.7 billion worth.

In business news, Big Four accounting firm KPMG LLP said Thursday it takes “full responsibility” for unlawful conduct by former KPMG partners and is trying to resolve the matter with the U.S. Department of Justice “fairly and expeditiously.” Since February 2004, the Justice Department has been investigating certain tax services that were offered by KPMG from 1996 to 2002.

Toronto stocks endured rollercoaster session Thursday, but ultimately closed higher, as rising oil prices fuelled a hot resource sector. The S&P/TSX composite index finished up 43.72, or 0.45%, to close at 9,866.57.

Volume on the senior exchange was 271 million shares.

Light, sweet crude rose 57¢to settle at US$55.57 per barrel on the New York Mercantile Exchange, even after OPEC agreed to raise its daily production quota.

The junior S&P/TSX venture exchange finished up 17.64, or 2.51%, to close at 1,695.16

The Canadian dollar closed up 1.01¢ US to 80.81¢ US as the greenback fell amid lowered U.S. inflation fears and as investors bought the loonie with the fear of an imminent federal election now dissipated.

In New York, markets ended in positive territory as good economic news was able to outweigh the effect of the rising price of oil.

The blue chip Dow Jones industrial average was up 18.80, or 0.18%, to 10,566,37; the tech heavy Nasdaq advanced 5.88, or 0.28%, to 2,074.92; and the broad based S&P 500 index lifted 2.67, or 0.22%, to 1,206.58.

The U.S. Federal Reserve’s “Beige Book” of regional economic conditions indicated that U.S. economic activity expanded at a decent pace over the last two months, retail sales were mixed, and overall manufacturing picked up.