North American stocks are poised to open higher Tuesday after a government report showed strong growth in U.S. retail sales.

Retail sales increased by a seasonally adjusted 2.3% after rising a downwardly revised 0.4% in December, the U.S. Commerce Department said today. Sales were originally seen 0.7% higher during December.

Economists had forecast a 0.8% increase in January sales.

Later this morning, a report on U.S. December business inventories will be released. Economists are expecting retail sales to rise 0.9% in January from 0.7% last month, and December inventories are seen continuing to rise at 0.5%.

Here at home, Statistics Canada said new motor vehicle sales increased in 2005 for the first time in three years, though they dropped slightly in the month of December.

In total, StatsCan said new motor vehicle sales turned a corner in 2005, gaining 3.5% to 1.6 million units — the first increase in three years after a record high in 2002.

Oil prices extended their decline, dropping below US$61 per barrel in overseas trading.

The Canadian dollar was little changed, edging up 0.03 of a cent to US86.53¢.

In earnings news, Inco Ltd. reported fourth-quarter net earnings of US$235 million, ending the its best-ever year with a full-year profit of US$836 million.

On Monday, Toronto stocks fell for the fifth straight session, tumbling on lower oil and commodity prices.

The S&P/TSX composite index lost 132.20 points , or 1.13%, to 11,519.49.

The metals and mining group fell 3.8% as investors took profits following the recent run-up in prices; golds dropped 2.5%.

The S&P/TSX Venture composite index dropped 92.42 points, or 3.65%, to 2,439.81.

In New York, inflation and interest-rate worries, after a Fed official said economic growth appeared to be picking up, and a negative report about Google Inc. sent the markets lower.

The Dow Jones Industrial Average fell 26.73 points to 10,892.32, the Nasdaq closed down 22.07 points at 2,239.81, while the S&P 500 dropped 4.13 points to 1,262.86.