Dow up 111.85 in
strong rally

NEW YORK -- Stocks rebounded sharply today as a key economic report soothed a rash of worry that the Federal Reserve may slow the economy to keep a lid on inflation.

The Dow Jones industrial average rose as much as 177 points before finishing 111.85 points higher at 9,063.37, about 120 points shy of record territory.

Advancers led decliners by more than a 3-to-1 margin on the New York Stock Exchange, with 2,348 up, 747 down and 416 unchanged. NYSE volume was 693.04 million shares vs. 638.10 million yesterday.

The Standard & Poor's 500 list rose 17.15 to 1,111.77, and the NYSE composite index gained 9.07 to 577.37. The Nasdaq composite index rose 16.77 to 1,868.41. The Russell 2000 index of smaller companies rose 5.91 to 482.89, and the American Stock Exchange composite index rose 4.20 to 746.52.

The price of the Treasury's main 30-year bond was up 1 17/32 point, or $15.31 per $1,000 in face value, by late afternoon, while its yield tumbled to 5.95 percent from 6.07 percent late yesterday.

Stocks and bonds rallied following a report saying wages and benefits -- which often account for two-thirds of a product's price -- rose just 0.7 percent from January through March.

The Labor Department reading on employment costs eased lingering jitters from Monday's revelation that Fed officials are now prepared to boost interest rates to prevent an inflationary spurt of economic activity.

Overseas today, Tokyo's Nikkei stock average rose 245.83 points, or 1.6 percent, to close at 15,641.26.