POLITICS...
WASHINGTON (AP) - On the rebound, Barack Obama left Hillary Rodham Clinton with fast-dwindling chances to deny him the Democratic presidential nomination after beating her in North Carolina and falling just short in an Indiana cliffhanger.

Obama was on track to climb within 200 delegates of attaining the prize, his campaign finally steadying after missteps fiercely exploited by the never-say-die Clinton.

His campaign dropped broad hints it was time for the 270 remaining unaligned party figures known as superdelegates to get off the fence and settle the nomination.

It was in that arena — even more than in the scattered primaries left — that the Democratic hyperdrama was bound to play out.

"You know, there are those who were saying that North Carolina would be a game-changer in this election," Obama told a roaring crowd in Raleigh, N.C., on Tuesday night, referring to Clinton's hope that an upset there would recast the race in her favor.

"But today what North Carolina decided is that the only game that needs changing is the one in Washington, D.C."

Clinton vowed to compete tenaciously for West Virginia next week and Kentucky and Oregon after that, and to press "full speed on to the White House."

But she risked running on fumes without an infusion of cash, and made a direct fundraising pitch from the stage in Indianapolis. "I need your help to continue our journey," she said.

And she pledged anew that she would support the Democratic nominee "no matter what happens," a vow also made by her competitor.

In an overnight e-mail appeal for donations, Obama said: "We have a clear path to victory."

But even as Obama took the day off Wednesday to be with his family in Chicago, Clinton showed no public signs of easing her pace. The campaign added a noon Wednesday appearance in Shepherdstown, W. Va., to her schedule. On Thursday, she planned to campaign in West Virginia, South Dakota and Oregon.

Polarizing, protracted and often bitter, the contest is hardening divisions in the party, according to exit polls from the two states.

A solid majority of each candidate's supporters said they would not be satisfied if the other candidate wins the nomination.

Fully one-third of Clinton's supporters in Indiana and North Carolina went beyond mere dissatisfaction to say they would vote for Republican John McCain instead of Obama if that's the choice in the fall.

Obama scored a convincing victory of about 14 points in North Carolina, where he'd been favored. Clinton squeezed out a narrow margin in Indiana after a long night of counting.

Racial divisions were stark.

In both states, Clinton won six in 10 white votes while Obama got nine in 10 black votes, exit polls indicated.

It was a slightly better performance than usual by Clinton among whites, while Obama's backing from blacks was one of his highest winning percentages yet with that group.

Against the backdrop of disunity, pressure is certain to intensify on the superdelegates to declare themselves and lasso Democrats together for the fall campaign against McCain. They are not bound by results in primaries or caucuses.

"There is an eagerness in the party to get this done and move on," said David Axelrod, chief Obama strategist. "There is no question that we can see the finish line."

David Lutz, 53, of Trinity, N.C., who lives on his Army pension and flea market sales, paid tribute to Obama's resilience in explaining why he switched from supporting Clinton in the final days.

"I finally got swayed Obama's way," he said. "He's like a magician — he pulled a lot of good tricks out of his hat."

A look at the night's numbers:
 - Obama won at least 69 delegates and Clinton at least 63 in the two states combined, with 55 still to be divided between the two candidates.
 - Obama's delegate total reached 1815.5 to 1,672 for Clinton in The Associated Press count, out of 2,025 needed to win the nomination.
 - Obama won North Carolina 56-42, with returns from 99 percent of precincts.
 - Clinton won Indiana 51-49, with returns from 99 percent of precincts.

And the races still ahead:
 - 28 delegates at stake in West Virginia in a week.
 - 103 delegates up for grabs a week later in Kentucky and Oregon.
 - 55 in Puerto Rico on June 1.
 - 31 in Montana and South Dakota on June 3.

On Tuesday, Clinton fell short of the Indiana blowout and the North Carolina upset that might have jarred superdelegates into her camp in a big way.

They have continued trickling toward Obama despite the fallout over his former pastor's racially divisive remarks and Clinton's win in Pennsylvania two weeks ago.

Obama sounded increasingly focused on the fall campaign.

"This primary season may not be over, but when it is, we will have to remember who we are as Democrats ... because we all agree that at this defining moment in history — a moment when we're facing two wars, an economy in turmoil, a planet in peril — we can't afford to give John McCain the chance to serve out George Bush's third term," he said.

Clinton was joined at her rally by her husband Bill, his face sunburned after campaigning in small-town North Carolina, and their daughter, Chelsea.

The New York senator stressed the issue that came to dominate the final days of the primaries in both states, her call for a summertime suspension of the federal gasoline tax. "I think it's time to give Americans a break this summer," she said.

Obama opposes the tax suspension, calling it a gimmick.

The impact of a long-running controversy over the Illinois senator's former pastor, the Rev. Jeremiah Wright, was difficult to measure.

In North Carolina, six in 10 voters who said Wright's remarks affected their votes sided with Clinton. A somewhat larger percentage of voters who said the pastor's remarks did not matter supported Obama.

Obama and Clinton both planned to campaign in the next primary states starting Thursday, after a day in Washington. Obama headed to Chicago after his Raleigh speech before coming to the capital.

HOUSING...
WASHINGTON (AP) - A broad housing rescue package aimed at preventing foreclosures would have the government step in to insure up to $300 billion in new mortgages for struggling homeowners.

The plan, designed to stabilize a key sector of the shaky economy, is set for a House vote Wednesday. It would let the Federal Housing Administration insure more affordable fixed-rate loans for borrowers currently too financially strapped to qualify.

The White House says President Bush would veto the measure, calling it a burdensome bailout that would open taxpayers to too much risk. That's despite Democrats' attempts to attract Republican support by including a grab-bag of measures Bush has called for.

They include legislation to overhaul the Federal Housing Administration, the Depression-era mortgage insurer, and to more tightly regulate Fannie Mae and Freddie Mac, the government-sponsored companies that finance home loans. Also part of the plan is a measure, which Bush has repeatedly requested, allowing state and local housing finance agencies to use tax-exempt bonds to refinance distressed subprime mortgages.

Its main element, written by Rep. Barney Frank, D-Mass., the Financial Services Committee chairman, is designed to help roughly 500,000 borrowers at a cost of $2.7 billion over the next five years. Under Frank's bill, the FHA would relax its standards to let debt-ridden homeowners refinance into more affordable, fixed-rate mortgages if their lenders agreed to take substantial losses on the original loans.

AIRLINES...
WASHINGTON (AP) - The chief executives of Delta Air Lines Inc. and Northwest Airlines Corp. are scheduled to appear at another hearing on Capitol Hill Wednesday as they continue to rebut some lawmakers' concerns about the carriers' proposed combination.

Delta CEO Richard Anderson and Northwest CEO Doug Steenland last month told House and Senate members that their airlines would be stronger together than they are apart.

For example, the executives said the merged carrier would be more competitive with large foreign carriers and better equipped to handle record fuel prices that led them to report a combined first-quarter loss totaling $10.5 billion. They reiterated that no hubs will be closed, no large-scale layoffs are planned and that the combination will create roughly $1 billion in cost savings.

Some lawmakers say the deal will raise ticket prices and eliminate jobs for their constituents. During more than four hours of hearings on April 24, both Republicans and Democrats expressed concerns about how the proposed Delta-Northwest combination would affect employees in, and service to, their home districts in Orlando, Fla., Memphis, Tenn., Milwaukee, San Diego, Minneapolis and elsewhere.

Anderson and Steenland acknowledged that sustained high fuel prices could reduce the frequency of some less profitable routes, but said flight options for travelers will rise and that only about 1,000 corporate jobs would be cut.

Union representatives were unconvinced and said the deal would sacrifice the rights of Eagan, Minn.-based Northwest workers, and that fuel costs will remain a problem for one large airline.

Besides Anderson and Steenland, various union representatives, consumer advocates and a Wall Street analyst also are scheduled to testify at Wednesday's hearing of the Senate subcommittee on aviation operations, safety and security.

The airline executives also have said they expect antitrust regulators to approve the deal without requiring concessions. The combined airline would be named Delta, be based in Atlanta and run by Anderson under the terms announced April 14.

Under the deal, Northwest shareholders would get 1.25 Delta shares for every Northwest share they own. But both companies' stocks have been hammered in recent weeks, down more than 20 percent each since the deal was announced.

GAS PRICES...
NEW YORK (AP) - Could the price of oil hit $200 a barrel?

That's what one forecaster says. As a result, oil futures blasted to a new record near $123 a barrel, gaining momentum as investors bought on the prediction of much higher prices and on any news hinting at supply shortages.

Retail gas prices edged lower, but appear poised to rise to new records of their own in coming weeks.

A new Goldman Sachs prediction that oil prices could rise to $150 to $200 within two years seemed to motivate much of Tuesday's buying. Analysts say a falling dollar and increasing concerns about declining crude production in Mexico and Russia contributed.

Oil prices have nearly doubled from about $62 a barrel a year ago, which Goldman sees as a sign that the world is in the midst of a ``super spike'' in oil prices.

Not everyone agrees. Citigroup analyst Tim Evans predicts that crude prices could as easily fall to $40 a barrel as rise to $200 over the next two years because supplies are, as Evans puts it, comfortable.

A House Judiciary Committee task force begins a series of hearings on rising gas prices for consumers and rising profits for oil companies. Today's witnesses include Mark Cooper of the Consumer Federation of America.