AP - Tax rebate checks gave consumers a little extra money in their pockets during May, but most were still spending conservatively, buying necessities such as food and gas and shying away from splurging on clothing or furniture. The result was some better-than-expected sales for the nation's retailers, with lower-priced merchants like discounters and wholesale clubs showing the strongest gains.

AP - Detroit automakers — and Chrysler in particular — nearly erased the North American productivity gap with their Asian rivals in 2007 thanks to worker buyouts, leaner plants and other improvements, but they still make less money per vehicle because of higher costs, according to the Harbour Report on manufacturing released Thursday.

Reuters - Many U.S. retailers reported better-than-expected May sales on Thursday, with discounters and dollar stores attracting customers looking to save money in the weak economy, but department stores continued to struggle.

Reuters - The number of U.S. workers filing new claims for jobless benefits fell unexpectedly last week to the lowest level since mid-April, a government report said Thursday, raising optimism that the sluggish economy may skirt a recession.

Reuters - Future U.S. bank failures linked to the downturn in the real estate market may include "institutions of greater size" than in the recent past, Federal Deposit Insurance Corp Chairman Sheila Bair said on Thursday.

AP - Rates on 30-year mortgages edged up this week to the highest level since March as investors worried about inflation threats.

Reuters - The European Central Bank reinforced the view on Thursday that the only way for interest rates in most major economies to go is up when, like the U.S. Federal Reserve days earlier, it rang alarm bells on inflation.

AP - Oil prices rose back to $125 a barrel Thursday after the dollar fell in response to comments by European Central Bank President Jean-Claude Trichet suggesting the bank could raise interest rates. At the pump, meanwhile, gas prices rose to a new record near $3.99, and are likely to hit $4 soon.

Reuters - Stocks pulled back from session highs on Thursday after Standard & Poor's cut the credit ratings of bond insurers MBIA Inc and Ambac Financial , keeping worries alive about credit losses.

AP - Wall Street rose sharply Thursday after investors got some comforting news about the economy — some better-than-expected retail sales in May and a drop in the number of laid-off workers seeking unemployment benefits. The Dow Jones industrials rose more than 130 points.