Tropical storm: Elida, the fifth tropical storm of the season, has formed off Mexico's Pacific coast.

The U.S. National Hurricane Center said Elida has sustained winds of nearly 45 mph with higher gusts.

Late yesterday, Elida was about 235 miles south of Acapulco and was traveling west-northwest at near 17 mph.

The center said Elida could become a hurricane late today or tomorrow but is expected to remain well south of the Mexican coast over the next two days.

Skies were cloudy in Acapulco, Zihuatanejo and Puerto Vallarta, three of the most visited Mexican beach destinations on the Pacific, though waves were under 3 feet, according to the government's latest port data.

Mexico's national weather service warned that Elida could bring heavy storms across the southern states of Guerrero and Oaxaca.

Nine slain: Gunmen killed nine people at an auto repair shop and two police investigators were shot dead near police headquarters in the gang-plagued city of Culiacan, prosecutors said Thursday.

Culiacan is the capital of northern Sinaloa state – home to the powerful Sinaloa drug cartel and the site of a wave of drug-related violence.

Six bullet-riddled bodies were found Thursday inside the auto body shop, and three more were found on the street outside, the state prosecutor's office said in a statement.

Two state police officers were shot in their truck near Culiacan's police headquarters. One was killed at the scene, and the other died later at a hospital.

Hotels closed: Mexico's Environmental Department is closing at least five small, upscale hotels and three other developments south of Cancun.

Officials say the businesses don't have permission to operate in the protected area near the Tulum Ruins.

Hotel owners say their papers are in order and the government can't shut them down.

Federal environmental prosecutor Patricio Patron said the hotels could eventually be demolished if the owners can't prove their legal right to the land. But he said that will take a year or more.

Prices rise: Mexico's central bank said rising food prices have pushed inflation to its highest level in three years.

A statement from the bank released Wednesday said annual inflation rose to 5.26 percent in June, the highest since November 2004, as prices for foods including rice, ham and vegetable oil climbed.

The bank said rising gasoline, electricity and housing costs contributed to the spike. But Mexico's Treasury Department said the monthly hikes in state-regulated gas prices are not contributing to consumer price gains – the latest in an ongoing dispute between the government and the bank over monetary policy.

The central bank has set a 3 percent inflation target for 2008. Consumer prices climbed by 3.76 percent in 2007.

Wal-Mart profits: Wal-Mart de Mexico SA said net income rose by 9 percent in the second quarter as new stores opened and customer traffic increased.