North American stocks are expected to open lower Tuesday, as U.S. wholesale inflation rose last month.

The U.S. Labor Department said today the April producer price index producer-price index for finished goods rose 0.6%, only slightly less than the 0.7% increase recorded in March.

The core index, which excludes food and energy items, rose 0.3% — the largest increase in three months.

Economists had called for a 0.4% overall PPI increase in April, but for core nonfood, non-energy prices to rise a more restrained 0.2%.

Separately, the U.S. Commerce Department said housing starts rose 11% last month to a seasonally adjusted 2.038 million annual rate, after a 17.6% slide in March. Building permits rose by 5.3% in April to a 2.129 million annual rate after slipping 3.4% in March.

Economists had forecast 8.9% increase in housing starts to an annual rate of 2.0 million in April.

Later this morning, the U.S. Federal Reserve is expected to release the industrial production report for April. Economists expect industrial production to increase by 0.2% in April, which would hold the capacity utilization rate steady at 79.4%.

Here at home, Statistics Canada said Canadian direct investment abroad increased by more than 10% through 2004, mainly as the result of acquisitions and increases in the working capital of foreign affiliates. At the same time, foreign direct investment in Canada rose by only 3%.

On Monday, financial stocks came to the rescue of Toronto markets, while U.S. markets posted a triple-digit rally after losing 2% last week.

At close, the Standard & Poor’s/TSX composite index was up 44.83 points or 0.48% to 9,323.28, while the S&P/TSX Venture composite index slipped 35.33 points or 2.16% to 1,597.81.

In New York, the Dow Jones industrial average added 112.17 points or 1.11% to 10,1252. 29. Broader stock indicators were also higher. The Standard & Poor’s 500 index was up 11.64 or 1.01% at 11,65.69, and the Nasdaq composite index gained 17.65 or 0.89% to 1,994.43.

Canada’s dollar fell to a seven-month low at US78.76¢ in Toronto, off 0.27 of a cent from Friday. Demand for Canada’s currency waned before reports this week forecast to show retail sales dropped and foreigners slowed their purchases of Canadian securities in March. Government reports last week showed factory shipments fell that month and the trade surplus remained at the smallest since December 2002 for a second straight month.