Stocks surge again // 179 is second-biggest point gain ever

NEW YORK - The Dow Jones industrial average racked up itssecond-biggest point gain ever today as investors heaved a sigh ofrelief after a tame reading on employment costs, a key force behindinflation.

``Inflation is the market's enemy, and it's not showing up,''said Ken Feinberg, a money manager at Davis Selected Advisers, whichoversees $8 billion. ``If we're not going to get inflation, andprofits stay strong, what's going to kill this bull market?''

The Dow Jones industrial average jumped 179.01 points to closeat 6,962.03.But in stark contrast with the market's selective attempts tobounce back from its recent slide, broader stock measures kept pacewith the blue-chip sector's gains.Stocks drew their boost from the bond market, where interestrates plunged below a psychologically important barrier after theLabor Department reported that Americans' wages and benefits rose amodest 0.6 percent in the first quarter.Since early last year, analysts have been worried that thestrong economy has been creating too much demand and too many jobs,forcing manufacturers to raise wages as they compete for workers.But the resulting increase in employment costs has yet to produce aninflationary spurt.Determined to keep it that way, the Federal Reserve raised oneof its key lending rates late last month, spurring a sharp downturnin the markets.The enthusiasm over today's employment cost data was bolsteredby two separate reports suggesting that other inflationary pressuresmay be easing.``A lot of people had to look at this morning's numbers andreassess their beliefs for the Fed,'' said Edward Rydwelski, atAbacus Financial Group in Chicago. ``Inflation has just remained sowell-behaved.''To be sure, many investors said reports later in the week ongrowth, manufacturing and employment may yet prompt the Fed to act inMay. ``You know how it goes - today the numbers are good and maybe(the Fed) won't raise rates,'' said Robert Basel, head block traderat Smith Barney. ``Next week everyone will be worked up again over adifferent number. But for today we're going to have a nice rally.''With today's gain, the Dow has recovered all but about 120points of a nearly 700-point slide from its March 11 high of7,085.16.As bond prices rose today, the yield on the 30-year Treasuryplunged below 7 percent for the first time since late March.Advancing issues swamped decliners on the New York StockExchange, where volume was heavy at 551.6 million shares.