Japanese Yen

Auto sales up 2.9 percent in MayU.S. sales of cars and trucks during May rose 2.9 percent over a year earlier but slipped from their torrid pace in March and April as dealers ran short of a number of popular models, automakers said yesterday.Automakers sold a total of 1.35 million cars and trucks in the United States during May, up from 1.32 million a year earlier.But the seasonally adjusted annual sales rate for the month fell to 14.6 million units, down from 15.9 million in March and 15.3 million in April.

U.S. light-truck sales soarSales of North American-built cars and light trucks continued to improve in mid-February, rising 8.7 percent, automakers reported yesterday.Automakers sold 295,160 domestic vehicles in the Feb. 11-20 period, compared to 271,553 a year earlier. Most of the increase came from light trucks, which rose a robust 26.5 percent from a year earlier, to 123,361 units. Domestic car sales actually fell 1.3 percent from last year, to 171,799.USAir, Philadelphia in accordUSAir Group Inc. said it reached a tentative agreement with the city of Philadelphia to move ahead with capital improvements at Philadelphia International Airport.

LONDON -- With world financial markets roiled by developments including a rise in American interest rates and the breakdown of trade talks between Washington and Tokyo, some of the world's biggest and savviest investors have been knocked down a notch or two. Among them is one of the biggest and savviest of all, financier George Soros.Mr. Soros, 63, known as an investment seer for his successful bets on currencies, gold and real estate, suffered a $600 million loss Feb. 14, the first full day of trading after trade talks between the United States and Japan collapsed.

NEW YORK -- The dollar retreated from Monday's highs as th Bundesbank's reluctance to ease credit put the brakes on the U.S. currency's rise.Meanwhile, the British pound surged as investors sought shelter from the tensions within the European rate mechanism, the system that ties eight other European Community currencies.After the dollar's swift ascent, investors have become reluctant to buy more dollars until they see evidence of the U.S. economic recovery or a greater willingness by the Bundesbank to cut German interest rates, traders said.

WASHINGTON -- U.S. steelmakers struck back this week against a push by the six largest automakers that assemble vehicles in the United States to end tariffs on certain types of imported steel. They warned that thousands of steel-making jobs could be at risk if the tariffs are lifted. The U.S. International Trade Commission will hear arguments as to whether tariffs on corrosion-resistant steel from six countries should end. The tariffs have been in place since 1993, after the steel industry accused foreign producers of dumping their products in the United States.

Police Blotter is a sampling of crimes from police reports in Baltimore City and Baltimore County. Baltimore City Southwestern District Drug arrest: Detective Ray Yost of the district's drug enforcement unit was in the 100 block of N. Smallwood St. on Tuesday when he saw a man on a bicycle allegedly selling drugs. When he and other officers approached, the man dropped the bicycle and fled to the 2200 block of W. Lexington St., where he was arrested. Officers seized 19 plastic bags of crack cocaine and $44. Keith Owen, 40, of the 2200 block of W. Lexington St. was charged with possession of cocaine with intent to distribute.

The Federal Reserve Board's decisive increase in short-term interest rates yesterday should put a quick end to the uncertainty that has roiled world financial markets in recent months. Uncertainty is the bugaboo of investors everywhere and leads to irrational responses. While the Fed's theory that pre-emptive action would head off inflation is persuasive, its super-cautious incremental approach to its task proved counter-productive. Each quarter-point rise in the federal funds rate merely boosted expectations for a further increase.

Toyota releases dour annual reportToyota Motor Corp., the strongest of Japan's automobile companies, may suffer its first operating loss ever this year if the Japanese yen stays at its current high level, officials said yesterday.The company's grim prognosis, a testament to the new troubles of Japan's once nearly invincible auto companies, was made as Toyota announced financial results for its last fiscal year, which ended on June 30. Sales were flat while net income fell 25.8 percent, the third consecutive yearly decline.

NEW YORK -- Shares of International Business Machines Corp. closed at the highest level in 20 months yesterday amid growing optimism that rebounding European markets will contribute to gains in revenue and earnings.Favorable comments by analysts covering the computer company fueled the rally. David Wu, an analyst at S.G. Warburg & Co. Inc., yesterday raised his 12-month price target on IBM to a range of $80 to $85 from $75."The bottom line is the ill winds from overseas economies are going to turn out to be good winds going forward," Mr. Wu said.

AMERICAN TOURISTS in Europe find their dollars going further than expected. But American exporters face a daunting challenge as the prices they must charge for goods rise above competitors'.That's the good news/bad news of the surge in the dollar against European currencies, especially the Deutsche mark. Going on since February, when the Group of Seven finance ministers implied they were halting this trend, it spiked last Monday. At least the dollar has not been gaining recently on the Japanese yen, as it was in the past year to the detriment of U.S. trade and payments balances.