North American markets may slide Wednesday morning, despite an encourage forecast from Hewlett-Packard, after a bigger-than-expected rise in July wholesale prices.

Earlier today, the U.S. Labor Department said the July producer price index for finished goods rose 1.0%, the largest increase since a 1.5% climb in October 2004.

The so-called core index, which excludes food and energy items, climbed 0.4%, the biggest increase in six months. Economists had called for a 0.6% rise in the overall index for wholesale prices and a just a 0.1% advance in the core index.

The data overshadowed an upbeat forecast from tech giant H-P. The company reported better-than-expected results for its fiscal third quarter and boosted forecasts for the current quarter after the bell Tuesday.

Here at home, Statistics Canada said wholesale sales rose 0.5% to $39.9 billion in June, marking a fifth consecutive monthly gain.. Excluding the auto sector, sales increased 1.0%, the agency said

In this mornings’s business news, LG Electronics and Nortel Networks are forming a joint venture to develop and supply telecommunications equipment and networks for South Korean and global customers. Nortel will own 50% plus one share in the joint venture, while paying US$145 million, contributing its South Korean distribution and services business and “other non-monetary consideration,” the companies said in a news release.

North American markets ended lower Tuesday, as investors responded to U.S. economic and corporate news indicating soaring oil prices are giving rise to inflationary pressures.

The S&P/TSX composite index finished down 115.85, or 1.09%, to 10.534.83.

All 10 TSX main sub-groups were down, with the energy sector falling 1.78%.

Toronto Dominion Bank shares dropped a modest 9¢, or 0.16%, to close at $55.47, after the bank agreed to pay out US$130 million to settle some of the legal fallout surrounding energy company Enron’s collapse. TD also said it will add US$300 million to its reserve for a securities class-action suit pending in Texas.

CIBC shares fell $1.04, or 1.46%, to $70.06 a five-month low after a report emerged that the bank could face a multibillion-dollar class action lawsuit related to its recent settlement with Enron Corp investors.

The junior S&P/TSX Venture composite index finished down 9.58, or 0.5%, to 1,901.09.

In New York, the Dow Jones industrial average tumbled 120.93, or 1.14%, to 10,513.45. The Nasdaq composite index fell 29.98, or 1.38%, to 2,137.06, while the S&P 500 index fell 14.53, or 1.18%, to 1,219.34,

The U.S. Commerce Department said the U.S. consumer price index rose 0.5% in July, driven mostly by a 3.8% jump in energy costs.