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The U.S. economy may be slowing, and consumers may be putting off those dreams of buying new cars and fancy homes - but it seems they are flocking to discount stores, where sales are rising beyond expectations.

Wal-Mart Stores Inc. reported that its sales in stores that have been opened for at least one year rose 3.2 per cent in April, ahead of the company's guidance for a rise of 1 per cent to 3 per cent. The shares jumped 1.5 per cent in premarket trading.

Costco Wholesale Corp. performed even better: its same-store sales rose 8 per cent, far higher than the consensus expectation for a rise of 6.1 per cent. Its shares rose 1.3 per cent in premarket trading.

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North American stock index futures suggested markets will open higher on Thursday morning, buoyed by this positive sign for consumer spending, even if it is at the lower end of the fashion chain. Futures for the Dow Jones industrial average rose 30 points, to 12,866. Futures for the broader S&P 500 rose 5 points, to 1400.

In Europe, the U.K.'s FTSE 100 fell 0.2 per cent and Germany's DAX index fell 0.4 per cent in afternoon trading after the European Central Bank held its key interest rate at 4 per cent, a six-year high, and the Bank of England held its rate at 5 per cent. In Asia, Japan's Nikkei 225 fell 1.3 per cent.

Crude oil fell slightly, to $123.14 (U.S.) a barrel, down 39 cents. Gold rose to $873.86 an ounce, up $5.11. The U.S. dollar rose against the euro and the Canadian dollar.

In Canada, housing starts for April plunged 12 per cent, far worse than the expectation for a 7.4 per cent drop - but commentators have noted that the year began with a surprisingly strong number of starts which makes the decline look less troubling. To complicate matters, the biggest drop was in condominium and apartment units.

Air Canada reported that its first quarter loss was $288-million. The loss was slightly better than some analysts had been expecting, but it still shows that Canada's largest airline is suffering from higher fuel prices and slowing traffic.

In other earnings news, investors will be looking for results from Canadian Tire Corp., Manulife Financial Corp., Canadian Natural Resources Ltd., and Telus Corp.

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