Wall Street stock-futures activity suggested the market would get off to a positive start on Tuesday after the U.S. Federal Reserve unveiled a new facility aimed at boosting consumer credit and the market for mortgage-backed securities.

Under the Term Asset-Backed Securities Loan Facility, the Fed will extend up to US$200 billion in non-recourse loans to holders of asset-backed securities backed by consumer and small business loans. The U.S. Treasury Department will extend $20 billion in funds under the Troubled Asset Relief Program to support the initiative.

The Fed also said it will purchase up to US$100 billion in government sponsored enterprise (GSE) debt through a series of competitive auctions starting next week. It will also purchase up to US$500 billion in mortgage-backed securities backed by GSEs, with the goal of starting that program by the end of the year.

In Toronto, investors will be digesting news that Bank of Montreal four-quarter earnings climbed to $560 million, buoyed by its Canadian personal and commercial operation.

BMO kicked off bank earnings season by reporting a quarterly profit of $560 million, up from $452 million in the same quarter of last year.

In today’s economic news, retail sales totalled $36.3 billion in September, up 1.1% from August and the strongest rise in sales in eight months, Statistics Canada reported today. Sales by new car dealers were up for the first time since January, accounting for most of this growth.

If price changes are factored in, retail sales in terms of volume were up by 0.7%, StatsCan said.

The Canadian dollar opened at US80.65¢, down 0.35 cent after surging up by 2.7¢ Monday.

South of the border, the U.S. economy contracted 0.5% the third quarter, softer than first believed, according to government data showing weaker consumer spending and overseas sales.

It was the weakest performance since a 1.4% decrease in third-quarter 2001 GDP.

Originally, the government had estimated third-quarter 2008 GDP fell 0.3%. Second-quarter 2008 GDP climbed 2.8%.

In today’s M&A news, BHP Billiton dropped its US$68 billion Rio Tinto takeover bid, citing the deteriorating economy.

In other earnings news, coffee chain Starbucks warned late Monday of an “extremely challenging” fiscal year and forecast a slump in sales.

In commodities news, the near-month crude oil contract was down US$2.70 at US$51.80 a barrel on the New York Mercantile Exchange.

Gold was down US$10.90 at US$809.50 an ounce.

Overseas, the Nikkei 225 shot up 5.2% in Tokyo after a three-day break.

In London, the FTSE 100 rose 0.6%.

On Monday, hefty gains for energy companies and financial firms led an upward trend on the Toronto Stock Exchange, lifting the benchmark index nearly 300 points.

The S&P/TSX composite index closed at 8,440.87, up 285.48 points, or 3.5%.

Junior companies posted gains of their own, with the S&P/TSX Venture index rising 18.95 points, or 2.7% to close at 723.12.

South of the border, stocks enjoyed a similar rally on news that president-elect Barack Obama and his economic team were putting together a plan for economic recovery.

The Dow Jones industrial average closed at 8,443.39, up 396.97 points, or 4.9%. The Nasdaq composite added 87.67 points to 1,472.02 and the S&P 500 index climbed 51.78 points to 851.81.

IE