Surging oil prices pull down stock prices again

NEW YORK (AP) ? Surging oil prices pulled stocks sharply lower for a third straight session Friday, with bland earnings at General Electric Co. and weak consumer data further dampening the economic outlook. The Dow Jones industrial average shed 396 points in the past three days.

Crude futures reached an intraday record of $78.40 a barrel as Israel intensified its attacks on Lebanon, raising concerns about potential supply disruptions throughout the Middle East. Crude eventually settled at $77.03 a barrel, up 33 cents, on the New York Mercantile Exchange.

Retail sales fell unexpectedly in June, as did consumer confidence for July. Industrial and financial conglomerate GE’s second-quarter earnings matched analyst estimates, but the in-line results troubled investors already concerned that the recent spate of profit warnings was a sign the economy could be headed for a downturn.

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WASHINGTON (AP) ? Consumers continued to curtail their spending last month as rising gasoline prices dampened purchases of other goods, a fresh indication of a cooling economy.

The cutback unexpectedly pushed retail sales into negative territory in June, when they dipped 0.1 percent after edging up by the same amount in May, the Commerce Department reported Friday.

Excluding gasoline sales, June retail sales fell 0.2 percent.

The decline surprised economists, who had predicted an increase of 0.4 percent for retail sales in June.

Still, the $363.8 billion estimated to have been rung up in June marked a 5.9 percent increase from the same month in 2005.

In another economic signpost, the Commerce Department also reported Friday that inventories held by U.S. businesses on shelves and back lots rose by 0.8 percent in May following a 0.7 percent increase in April. Inventory increases during a period when the economy is slowing could be a warning sign that factory production will be reduced in future months to get inventories more in line with sales.

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FARMINGTON HILLS, Mich. (AP) ? A much-anticipated meeting between the leaders of General Motors Corp. and the Renault-Nissan alliance took place Friday evening over dinner, said Renault SA and Nissan Motor Corp. chief executive Carlos Ghosn.

Ghosn’s meeting with GM Chairman and Chief Executive Rick Wagoner was the first time they have spoken in person in the two weeks since billionaire investor Kirk Kerkorian disclosed his proposal to have GM join Nissan and Renault’s alliance.

Ghosn said the purpose of the meeting was merely to gauge initial interest on both sides and discuss how to proceed in evaluating the proposal.