NEW YORK — Wall Street barreled higher again Friday after the week's most anticipated economic reading indicated that inflation excluding the price of gas remained tepid last month, easing some concerns that have jolted stock and bond markets in recent sessions.

The Dow Jones industrial average in the past three days has surged more than 344 points, the biggest three-day point gain since November 2004. The blue-chip index is now less than 40 points below its record close reached June 4.

The three major stock indexes finished the week higher, even as Friday's consumer price index showed prices rose at the fastest pace in 20 months in May as the cost of gas jumped. Investors were enthusiastic that the core CPI, which excludes food and energy prices, rose 0.1 percent. The figure, which the inflation-wary Federal Reserve watches closely, was below the 0.2 percent increase Wall Street expected.

The yield on the benchmark 10-year Treasury note fell to 5.16 percent Friday from 5.23 percent late Thursday after release of the CPI report helped ease concerns that the Fed might raise interest rates this year.

CONSUMER PRICES RISE AT FASTEST PACE IN 20 MONTHS

WASHINGTON — Consumer prices surged in May at the fastest pace in 20 months, fueled by another big rise for gasoline and an increase for food as well.

Inflation was docile in other areas, with prices for computers, clothes, cars and airline tickets all falling.

The Consumer Price Index posted an increase of 0.7 percent, the biggest one-month gain since the fall of 2005 when energy prices surged after Hurricane Katrina shut down Gulf Coast oil production. Excluding energy and food, the increase for so-called core inflation was just 0.1 percent.

Wall Street chose to focus on the lower-than-expected core reading, believing the Federal Reserve will be happy such pressures are beginning to ease and will leave interest rates alone at their meetings for the rest of the year.

OIL SETTLES AT $68 A BARREL

NEW YORK — Crude oil futures settled at $68 a barrel on Friday, their highest close since September, while gasoline futures extended their rally, raising the prospect that prices at the pump will stabilize and possibly even rise after falling for several weeks.

Analysts say oil prices were boosted by unrest in the Middle East and a lower-than-expected core inflation figure, which encouraged investors to move money from fixed income investments to commodities. But oil futures also followed the lead of gas futures, said James Cordier, president of Liberty Trading Group, in Tampa, Fla.

Gas futures have risen several days this week after a government report Wednesday that shocked traders by showing gasoline inventories remained flat as refineries used less of their capacity than they had the week before.

PENN NATIONAL AGREES TO $6.1B BUYOUT

PHILADELPHIA — Racetrack and casino operator Penn National Gaming Inc. said Friday it agreed to be acquired by funds managed by two investment companies for about $6.1 billion in cash.

The company, with net revenue of $2.2 billion in 2006, operates 18 gambling facilities stretching from Maine to New Mexico as well as Ontario, Canada.

Its properties include four Hollywood Casinos in Louisiana, Illinois and Mississippi; Argosy casinos in Illinois, Indiana, Missouri and Iowa; and the Boomtown Casino in Biloxi, Miss. It has racetracks, some with slots, in Maine, West Virginia, New Jersey, Pennsylvania, Ohio and New Mexico.

WINNEBAGO THIRD-QUARTER PROFITS FALL

DES MOINES, Iowa — Motor home manufacturer Winnebago Industries Inc. reported Friday its earnings fell 14.4 percent in the third quarter as higher materials and labor costs hurt its profit margins.

Winnebago earned $11.3 million, or 35 cents a share, in the three months ended May 26 versus $13.2 million, or 40 cents a share, a year ago.

Sales rose 5.2 percent to $231.7 million from $220.3 million a year ago.

Analysts polled by Thomson Financial expected 49 cents a share on sales of $245.5 million.

The company said customers have been buying lower margin motor homes in recent months. It also incurred higher expenses of about $1 million from moving its dealer days event to the third quarter from the fourth quarter and about $900,000 for bonuses to executives.

IPHONE AVAILABILITY LIMITED AT FIRST

SAN ANTONIO — Customers clamoring to get their hands on Apple Inc.'s highly anticipated iPhone better make sure they're at the right store.

The combination cell phone, media player and wireless Web device will only be sold at stores owned by Apple Inc. and AT&T Inc., which has an exclusive deal to offer service for the device when it's launched June 29. It will also be available at launch on Apple's Web site.

The device goes on sale at 6 p.m. local time in each U.S. market.

AT&T spokesman Fletcher Cook said the limited availability will only be for the initial launch. Later, it will be sold on AT&T's Web site and through other outlets.

BERNANKE: BANKS STILL IMPORTANT PLAYERS

WASHINGTON — Banks play an important, though perhaps somewhat diminished, role in providing credit as consumers and businesses increasingly turn to other financial players, Federal Reserve Chairman Ben Bernanke said Friday.

A copy of Bernanke's prepared remarks was made available in Washington.

The United States' financial landscape has changed over the past decades. A company, for instance, can turn to a venture capitalist or Wall Street firm to tap financial capital. A prospective homeowner can turn to various mortgage providers — other than a traditional bank — to get a home loan.

PEARSON REPORTEDLY EYEING DOW JONES

NEW YORK — Pearson PLC, publisher of the Financial Times, is trying to rally partners for a possible bid to rival Rupert Murdoch's $5 billion offer for Wall Street Journal publisher Dow Jones & Co., the Journal reported Friday.

Pearson, based in the United Kingdom, has approached media company Hearst Corp. as well as General Electric Co. about a possible joint offer, the Journal reported, citing unnamed people familiar with the matter.

Spokesmen for Pearson didn't respond to messages for comment. A GE spokesman declined to comment, but GE's chairman and CEO, Jeff Immelt, said recently that GE wasn't interested in Dow Jones.

CHINA PROMISES CRACKDOWN ON PIRACY

BEIJING — China has promised to pursue product pirates identified by U.S. authorities in a new effort to stamp out its thriving counterfeit industry, the head of the U.S. customs agency said Friday.

The agreement comes amid mounting concern that Chinese pirates are endangering public safety in the United States and elsewhere by selling fake medicine, auto parts and other goods.

China accounted for about 80 percent of the 14,775 shipments of counterfeit goods seized at U.S. ports last year, said W. Ralph Basham, commissioner of U.S. Customs and Border Protection.

Under a memorandum of cooperation signed this week, U.S. Customs will provide China with information on the source of seized goods, and Beijing will report back within 90 days on the status of efforts to track down the counterfeiters, Basham told reporters.

CHINA HOPES HONG KONG WILL RESUME TOOTHPASTE SALES

BEIJING — China is urging Hong Kong to resume the sale of three brands of Chinese toothpaste containing a chemical found in antifreeze, saying the small amounts involved were harmless to people.

Hong Kong's ban was the latest in a slew of recalls and warnings linked to Chinese toothpaste. The United States, New Zealand, Singapore, Panama and several other Latin American and Caribbean countries have taken similar actions.

Hong Kong's health department warned consumers earlier this week not to use toothpaste sold under the names Maxam Toothpaste with Fluoride, Sanqi and Tianqi.