BRIEFCASE.

Byline: -- Staff and Wire Services

Toyota, Honda see rise in sales

DETROIT -- Toyota Motor Corp. and Honda Motor Co. saw double-digit U.S. sales increases in May as consumer demand for more fuel-efficient vehicles grew, the automakers reported Thursday.

Rising fuel prices hurt domestic manufacturers, which rely more heavily on sales of trucks and sport utility vehicles. General Motors Corp. said its sales were down 12 percent for the month, while Ford Motor Co. said its sales were down 2 percent and DaimlerChrysler AG's Chrysler Group said sales were down nearly 11 percent

Paul Ballew, GM's executive director of market and industry analysis, said automakers felt the full brunt of a spike in gas prices that began in April. Rising interest rates also hurt sales, he said.

Industrywide sales were flat compared with May 2005, with trucks and SUVs down 7 percent but cars up 6 percent, according to Autodata Corp. The seasonally adjusted sales rate for May, which shows what total sales would be if they remained at the same rate for the entire year, was 16.1 million vehicles. Automakers sold 17 million vehicles in 2005.

Economy a mixed bag for investors

WASHINGTON -- The U.S. economy appears to be shifting into a lower gear, with residential construction falling sharply and manufacturing activity slowing. The big question: Will the slowdown come in time to keep inflation from heating up?

Investors got mixed signals on inflation in a raft of new economic data on Thursday, with a key gauge of wage inflation posting an improved reading while a barometer of manufacturing prices posting a sharp increase.

Wall Street chose to focus on the benign inflation reading and strong May sales gains reported by many retailers. The Dow Jones industrial average rallied for a second session.

On the slowdown front, the Commerce Department reported that residential home building dropped by 1.1 percent in April, the biggest decrease since January 2004.

The drop was large enough to pull overall construction spending down by 0.1 percent after the building industry set a string of record highs in recent months, reflecting a boom period fueled by the lowest mortgage rates in more than four decades.

Government asks Exxon for $92M

ANCHORAGE, Alaska -- Federal and state authorities asked Exxon Mobil Corp. on Thursday for $92 million to clean up remaining oil from a devastating spill nearly 20 years ago.

They submitted a proposal for further cleanup, saying studies in the last five years have shown oil from the grounding of the Exxon Valdez tanker is lingering in the tidal zones of Prince William Sound. The oil is reducing survival rates of some marine species and disrupting fishing activities in the region, according to a joint statement Thursday by the Department of Justice and the state's Department of Law.

The nation's largest oil spill emptied 11 million gallons of crude oil into Prince William Sound in 1989, killing hundreds of thousands of birds and marine animals and soiling more than 1,200 miles of rocky beach.

Irving, Texas-based Exxon has paid $900 million in restitution for the spill required in a 1991 civil settlement.

OPEC won't slow down production

CARACAS, Venezuela -- OPEC, pumping almost as much as it can amid soaring oil prices, decided Thursday to keep its output steady, rejecting suggestions by Venezuela to cut production.

Qatari Oil Minister Abdullah al-Attiyah told reporters of the decision after OPEC members finished a closed-door session that solidified an earlier informal agreement not to adjust its official output quota of 28 million barrels per day.

Speaking shortly before OPEC's formal meeting, al-Attiyah said the market has more than enough supply but that ``at this price level, OPEC won't cut production.'' However, Al-Attiyah cautioned that OPEC could change course by the time it meets next in September.

Analysts said the Organization of Petroleum Exporting Countries put aside concerns about rising global inventories of crude and weakening demand growth, at least temporarily, to focus on a more immediate worry: $70-a-barrel oil.