Stocks are expected to open flat Wednesday as traders weigh the impact of two conflicting U.S economic reports and crude oil prices rose to nearly US$61 a barrel.

The Commerce Department said the U.S. trade deficit narrowed 2.7% to $55.35 billion in May as oil prices eased during the month. Economists’ forecasts hade called for a modest widening to US$57.20 billion compared with $56.96 billion in April.

Separately, the U.S. Labor Department said prices of imported goods rebounded in June as prices of crude oil climbed to record highs. Overall import prices rose 1%, reversing an equally large decline in May. Economists had called for a 1% increase in the index last month, compared with a 1.3% drop in May.

Here at home, Statistics Canada said imports registered a big gain in May, fuelled by inbound energy products as well as heavy machinery headed for a boom in construction projects in Western Canada.

Canadian companies imported $32.3 billion in merchandise, up 2.3%, while exports slipped 0.5% to $36.3 billion. As a result, the trade surplus fell to just under $4.0 billion.

Crude oil futures rose back near US$61 a barrel today as tropical storm Emily churned toward Gulf of Mexico oil platforms, increasing concern over supply disruptions. Light sweet crude for August delivery gained 20¢ to US$60.82 a barrel on the New York Mercantile Exchange.

In earnings news, clothing manufacturer Gildan Activewear Inc. raised its earnings guidance for the quarter just ended by 10% above its most recent guidance of approximately US50¢ per share.

Toronto stocks finished marginally lower Tuesday, as the Bank of Canada signalled higher interest rates ahead, even as it decided to hold the line on its key rate for now.

The S&P/TSX composite index finished down 9.80, or 0.10%, to 10,207.92.

The Bank of Canada left the overnight rate unchanged at 2.5%, but indicated that “some reduction in the amount of stimulus will be required in the near term.” The bank’s next scheduled announcement falls in September.

On currency markets, the Canadian dollar gained almost one cent as investors contemplated the likelihood of Canadian rates hikes coming sooner than previously expected. The loonie closed Tuesday at US83.15¢, up 0.95 of a cent.

TD Banknorth Inc., a U.S.-based subsidiary of TD Bank Group, said it is paying US$1.9 billion in cash and shares for Hudson United Bank Corp. TD Bank shares gained 10¢, or 0.18%, to close $55.17.

Manulife Financial Corp. gained 98¢, or 1.64%, to close $60.80 as company CEO Dominic D’Alessandro said the insurance company will use its capital to buy back more stock and increase dividends this year, as it hadn’t identified any acquisitions that fit its plans.

The junior S&P/TSX Venture composite index exchange finished down 3.62, or 0.21%, to finish 1,724.26.

The blue chip Dow Jones industrial average fell 5.83, or 0.06%, to 10,513.89. The tech heavy Nasdaq composite increased 7.72, or 0.36%, to 2,143.15;

The S&P 500 rose 2.77, or 0.23% to 1,222.21, just 3 points shy of its four-year high of 1,225.31, reached March 7. The index briefly surpassed that level before edging back in the last hour of trading.