Stocks appeared poised to open sharply lower Thursday as investors continue to fret over interest rates.

North American stocks continued their slide Wednesday, with the Toronto market hit hard by falling commodity prices and U.S. markets waylaid by worries over rising interest rates and a slowing domestic economy.

Oil prices dipped below US$70 a barrel for the first time in two weeks following the announcement of the death of al-Qaida’s leader in Iraq, Abu Musab al-Zarqawi.

In this morning’s economic news, the European Central Bank raised its key interest rate by a quarter of a percentage point to 2.75% on Thursday in a move aimed at keeping inflation at bay.

European stock markets were down around 2%.

South of the border, he number of laid-off American workers filing claims for unemployment benefits plunged last week by the largest amount in eight months, but it may have been a statistical fluke. The U.S. Labor Department reported Thursday that 302,000 Americans filed for benefits last week, down by 35,000 from the previous week. Analysts had been expecting a much smaller decline.

Here at home, Statistics Canada reported that labour productivity in Canada’s business sector grew 0.5% between January and March, a similar pace to the quarterly average in 2005. At the same time, unit labour costs, a key measure of inflationary pressures on wages, slowed for the first time in more than a year.

The Canadian dollar opened at US89.46¢, down 0.35 of a cent from Wednesday’s close.

The seasonally adjusted annual rate of housing starts was 216,800 units in May, down marginally from 217,900 units in April, Canada Mortgage and Housing Corp. (CMHC) said today.

In earnings news, Procter & Gamble said late Wednesday that it still expects its sales to grow between 20% and 24% in its fiscal fourth quarter while earnings per share should come in between US52¢ and US54¢.

In M&A news, real estate services company FirstService Corp. has acquired a majority interest in Chicago-based mortgage banking and loan administration company Cohen Financial. Terms of the transaction were not disclosed.

Overseas, Japan’s benchmark Nikkei 225 index tumbled 3.07% to 14,633.03 points, its lowest in six months, while Indian shares plunged 4.7%. The Japanese stock market has fallen about 9% this year, while Indian shares have fallen a stunning 26% over the last month.

Hong Kong shares also declined, with the blue-chip Hang Seng Index falling 366.44 points, or 2.32%, to 15,450.11.

North American stocks continued their slide Wednesday, with the Toronto market hit hard by falling commodity prices and U.S. markets waylaid by worries over rising interest rates and a slowing domestic economy.

The S&P/TSX composite index lost 190.72, or 1.63%, to 11,475.42.

The S&P/TSX Venture Exchange index fell 34.38, or 1.25%, to 2,722.69.

In New York, markets continued to drop in the wake of comments from the head of the Federal Reserve that inflation was becoming a concern.

The Dow industrials was down 71.24 points at 10,930.90, the Nasdaq composite index fell 10.98 points to 2,151.80, its lowest level since November. The S&P 500 Index dropped 7.70 points to 1,256.15.