North American markets appear ready to extend their losses Tuesday as investors already uneasy about weak corporate profit reports awaited a reading on overseas demand for U.S. products.

The U.S. Commerce Department will release monthly trade data for November at 8:30 a.m. ET.

Investors expect the U.S. trade deficit narrowed significantly as oil prices fell.

U.S. imports of other products are also expected to have fallen in November, reflecting the deepening recession.

But at the same time, spreading weakness overseas has sharply curbed demand for American exports, which until recently had been the one bright spot for the U.S. economy.

Underscoring the pain American manufacturers are feeling, aluminum giant Alcoa Inc. reported late Monday that it lost US$1.19 billion during the fourth quarter as demand for aluminum plunged.

The Canadian dollar opened at 81.68 cents US on Tuesday, down 0.60 of a cent from Monday's close.

Toronto's S&P/TSX composite index tumbled 291.85 points or 3.2 per cent to 8,793.33 on Monday, leaving the key index down 2.1 per cent for the trading year so far.

South of the border, stocks fell for the fourth session in a row on fear that corporate profit reports will signal a recovery in the economy is further off than originally anticipated.

New York's Dow Jones Industrial Index shed 125 points, and broader stock indexes fell more than two per cent.

Light, sweet crude fell $1.17 to $36.42 in Tuesday electronic premarket trading on the New York Mercantile Exchange.

Asian markets retreated sharply, hurt by reports that Sony Corp. is sinking into its first yearly operating loss in 14 years as sales fizzle for digital cameras, flat-panel TVs and other gadgets.

Japan's Nikkei stock average fell 4.8 per cent. Hong Kong's Hang Seng index dropped 2.2 per cent.

In late morning trading, Britain's FTSE 100 was down 2.3 per cent, Germany's DAX index was down 2.4 per cent, and France's CAC-40 was down 2.6 per cent.