BEIJING — China took steps Friday to let its currency trade more freely against the dollar and to cool its sizzling economy ahead of talks in Washington over Beijing's soaring trade surplus.

China eased controls on the yuan amid pressure from the U.S. and Europe, but cautioned against expecting sharp increases in its value. The U.S. responded that Beijing is not moving fast enough to allow its currency to strengthen and help reduce its growing trade gap with China.

The Chinese government also raised interest rates for the second time in just over two months and tightened bank credit to slow its economy.

American officials are pushing Beijing to raise the yuan's value in hopes that will help cut the multibillion-dollar U.S. trade deficit with China by making Chinese goods more expensive.

DOW JONES REGISTERS 24TH RECORD CLOSE

NEW YORK— Stocks surged higher Friday as another round of corporate takeovers prodded investors to continue a largely uninterrupted months-long buying streak. The Dow Jones industrial average registered its 24th record close this year and the Standard & Poor's 500 index came within striking distance of its record high.

Beyond the buyout news, which has lent buoyancy to the markets for months, a stronger-than-expected reading on consumer sentiment helped investors set aside some concern that consumers unnerved by higher gas prices would pare back spending and up-end the economy's smooth slowdown.

The latest takeover news, including deals involving marquee names like General Electric Co. and Microsoft Corp., signaled that the enormous amount of liquidity that has lubricated global stock markets in recent months doesn't appear on the verge of evaporating.

MICROSOFT PAYS $6B IN CASH FOR AQUANTIVE

NEW YORK — Microsoft took a deep plunge into the online advertising business Friday, paying $6 billion in cash and a massive 85 percent premium to snap up one of the last major players in the sector, aQuantive Inc.

The deal came just one day after another online ad company, 24/7 Real Media Inc., was acquired for $649 million by advertising conglomerate WPP Group PLC and is the clearest proof yet of the urgency that technology and media companies feel about getting a piece of the online advertising boom.

It is the largest acquisition in Microsoft's history. The all-cash, $66.50 per share price represents an 85 percent premium to aQuantive's Thursday closing price of $35.87.

Microsoft Corp., whose MSN site has struggled behind search leader Google Inc. and Yahoo Inc., is hoping that the acquisition of aQuantive will jump-start its own efforts to sell and deliver advertising on the Internet, a business that is on pace to grow nearly 30 percent this year, way ahead of other forms of advertising.

WOLFOWITZ DEPARTURE JUST THE FIRST STEP

WASHINGTON — The Wolfowitz episode hobbled the World Bank's work of aiding the poor, and Paul Wolfowitz's resignation was just the first step in a healing process. The Bush administration hopes to quickly name a successor to take over that effort.

The new chief will need to regain trust, rebuild credibility and mend frayed relations inside the poverty-fighting institution as well as with its 185 member countries.

All of those things are critical for Wolfowitz's successor, who will have to persuade countries to contribute close to $30 billion over the next few years to fund a centerpiece bank program that provides interest-free loans to the poorest countries.

One day earlier, Wolfowitz announced that he would step down on June 30, his leadership undermined by a furor over a hefty compensation package he arranged in 2005 for Shaha Riza, a bank employee and his girlfriend.

CLEAR CHANNEL BOARD ACCEPTS BUYOUT BID

SAN ANTONIO — The board of Clear Channel Communications Inc. on Friday accepted an offer from private equity buyers with a slightly higher price and a rare opportunity for shareholders to continue owning a stake in the radio and billboard company even after it goes private.

The board and the buyer's group led by Thomas H. Lee Partners LP and Bain Capital Partners LLC have faced stiff resistance from several large shareholders who didn't think earlier offers were enough.

The new offer of $39.20 per share, or about $19.45 billion, was initially rejected by the board two weeks ago. The board approved the deal once the private equity partners agreed to allow shareholders to own shares in the new company with the same benefits as the equity firms.

The buyer's group is also assuming $8 billion in debt.

GAS PRICES SET NEW RECORDS AT PUMP

NEW YORK — Gasoline prices set more records at the pump Friday, while gasoline and oil futures prices turned mixed after the previous session's big advance.

Retail gasoline prices rose 1.5 cents overnight to a national average price of $3.129 per gallon, a new high, and have risen 26 cents in the last month, according to AAA and the Oil Price Information Service.

Analysts blame strong consumer demand and a spate of unexpected refinery outages for the high prices, and say it could be mid-summer before they ease.

Meanwhile, gasoline futures for June delivery fell 2.89 cents to settle at $2.4077 a gallon on the New York Mercantile Exchange, with analysts attributing the decline to profit-taking from Thursday's 9.96-cent increase in the June contract.

NORTHWEST SET TO EXIT BANKRUPTCY

NEW YORK — After 20 months of a wrenching reorganization, Northwest Airlines got approval on Friday to emerge from bankruptcy protection into an industry besieged by higher fuel costs and crowded with competitors.

Eagan, Minn.-based Northwest Airlines Corp. announced it would exit bankruptcy on May 31, after Judge Allan Gropper approved its reorganization plan Friday. Northwest, the nation's fifth-largest airline, also plans to announce any post-bankruptcy marketing plans when it emerges.

Chief Executive Douglas Steenland said the company had reached all its bankruptcy goals, which included cutting annual operating costs by $2.4 billion, reducing debt and lease expenses by $4.2 billion a year and shrinking the overall size of its business.

By its latest count, the company employs 30,787 full-time workers, down from 33,755 in the quarter when it filed for bankruptcy. Its remaining flight attendants, pilots and other workers took pay cuts to help the company achieve its goals.

BRITISH AIRWAYS PREPARES FOR FINES

LONDON — British Airways PLC on Friday admitted anticompetitive behavior while posting a net loss for its latest quarter.

The airline said it has earmarked 350 million pounds ($690 million) to cover fines that are likely to stem from an investigation into whether senior staff had discussed fuel surcharges on tickets with rivals, after acknowledging "breaches" of policy.

BA reported a net loss of 124 million pounds ($244.5 million) in the fourth quarter, compared to a net profit of 80 million pounds ($157.8 million) a year ago, after threatened cabin crew strikes in January and a new British tax on flights bit into the carrier's bottom line.

Revenue dropped 6 percent to 1.9 billion pounds ($3.8 billion) after thousands of passengers canceled their reservations before the strike was dropped, costing the carrier 80 million pounds ($157.8 million).

British Airways stock closed down 2.9 percent on the London Stock Exchange.

CONTROVERSIAL CONTRACT TALKS WITH UAW EXPECTED

DETROIT — With Detroit automakers losing billions and their market share in a slump, this summer's contract talks with the United Auto Workers promised to be more contentious than ever. But Monday's announcement that Daimler would sell most of Chrysler to private equity firm Cerberus Capital Management LP likely means the union will face even deeper demands for givebacks as the automakers try to pare costs to compete with Honda and Toyota.