North American stocks are likely to open lower Thursday ahead of the Federal Reserve’s decision on interest rates.

The Fed is likely to announce that rates will be staying put hold at 5.25%. The Fed announcement is due at 14:15 ET.

In this morning’s economic news, the U.S. economy grew at a 0.7% annual pace in the first three months of this year, the weakest in more than four years as businesses sold off inventories but consumer spending remained strong, the U.S. Commerce Department reported today.

Influenced by the strength of the Canadian dollar, prices for manufactured products declined in May after six consecutive monthly increases, Statistics Canada reported today. Crude oil pushed down prices for raw materials.

From April to May, prices charged by manufacturers, as measured by the Industrial Product Price Index, registered a 0.5% decline after six consecutive monthly increases. The decrease in prices basically reflects a drop in the prices for motor vehicles and other transportation equipment as well as primary metal products and pulp and paper products.

The Raw Materials Price Index declined 0.2% from April to May after registering three consecutive monthly increases. The month-over-month decline in the index is mainly attributable to mineral fuels and ferrous materials, while non-ferrous metals continued their rise for a third consecutive month.

The Canadian dollar opened at US93.98¢, up 0.54 of a cent.

In M&A news, Yamana Gold and Northern Orion Resources are proposing to merge and take over Meridian Gold, in a multibillion-dollar combination that would create one of the top five gold producers in the world. Together, the three companies would have a market value of about $10 billion and an estimated annual gold production of more than 1.4 million ounces by 2009.

In earnings news, Constellation Brands posted a 65% drop in fiscal first-quarter net income amid impacts from its move to cut distributors’ inventories, new joint ventures and continued weakness in the United Kingdom.

General Mills said profit for its fiscal fourth-quarter rose less than 1% as ingredient and marketing costs climbed amid solid sales and a strong international performance.

Crude-oil futures rose 47¢ to $69.44 a barrel, a day after weekly energy-inventory data showed oil stocks rose, but gasoline and distillate inventories, which were expected to rise, fell instead.

Overseas, the FTSE 100 was up 0.6% in London and the Nikkei 225 gained 0.5% in Tokyo.

Toronto stocks reversed a three-day losing streak and ended higher on Wednesday as energy shares were lifted by an oil-price rally and materials issues rose.

The S&P/TSX composite index closed up 78.04 points, or 0.57%, at 13,741.92, recovering from a 128.6-point fall earlier in the day.

The benchmark index had shed more than 430 points in the previous three sessions.

The junior S&P/TSX Venture composite index rose 1,506.34 points, or 0.33%, to end at 3,129.86.

In New York, U.S. markets rallied, ending a three-day slide, ahead of tomorrow’s decision on interest rates from the Federal Reserve Board. The Fed is widely expected to leave the fed funds rate unchanged.

The Dow Jones industrial average was up 90.07 points, or 0.68%, at 13,427.73. The S&P 500 was up 13.45 points, or 0.90%, at 1,506.34. The Nasdaq composite index was up 31.19 points, or 1.21%, at 2,605.35.