U.S. stock futures traded lower Wednesday, with caution returning to the market after seven sessions of gains.

Here at home, Statistics Canada said retail sales rose 1.2% in May to $34 billion, more than offsetting a modest decline in April. In volume terms, retail sales increased 0.7%.

Most types of stores had higher sales, with the automotive sector the largest contributor to the increase, StatsCan said.

Investors will be taking a close look at the quarterly earnings of several U.S. banks.

On Wednesday, Morgan Stanley reported a loss applicable to common shareholders of US$1.26 billion, or US$1.10 per share, in the second quarter, compared with a profit of US$1.1 billion, or US$1.02 a share, a year earlier.

Wells Fargo said second-quarter earnings soared 81%, hitting a new company record, amid the bank’s acquisition of Wachovia, topping analysts’ expectations. Profit increased to US$3.17 billion, or US57¢ a share, from US$1.75 billion, or 53¢, a year earlier, San Francisco- based Wells Fargo said today in a statement.

Bank of New York Mellon said second-quarter earnings fell sharply amid securities losses and write-downs related to the ongoing housing woes. Net income totaled US$176 million, or 15¢ a share, compared with US$309 million, or 27¢, a year ago.

On Tuesday, Apple reported a 15% profit rise on surging iPhone sales.

Starbucks swung to a stronger-than-forecast US$151.5 million profit as store traffic improved.

In commodities news, oil futures fell over US$1 a barrel ahead of weekly energy inventories figures.

Overseas, Japan’s Nikkei 225 was up 0.5%, while Hong Kong’s Hang Seng was 0.1% higher

In Europe, the U.K. FTSE 100 was off 0.4% to 4,461.66, the German DAX Xetra index slipped 0.4% to 5,073.09 and the French CAC-40 index lost 0.7% to 3,281.27.

The Toronto Stock Exchange finished lower on Tuesday for the first session in seven, despite a sunnier economic outlook released by the Bank of Canada.

The S&P/TSX composite index fell 25.39 points, or 0.2%, to close at 10,515.32.

The materials group dropped 1.2% as gold and other commodity prices retreated.

The junior S&P/TSX Venture index shed 3.45 points, or 0.3%, to close at 1,114.64.

In New York, U.S. stocks failed to hold onto strong gains earlier in the day, but still finished in positive territory.

The Dow Jones industrial average added 67.79 points, or 0.8%, to 8,915.94. The seventh consecutive gain marks the blue-chip average’s longest rally in two years.

The S&P 500 index rose 3.45 points, or 0.4%, to close at 954.58.

The Nasdaq composite index advanced 6.91 points, or 0.4%, to end at 1,916.20.

IE