Stocks surged today after a new government report suggested that inflation remains in check, raising hopes the Federal Reserve will not need to raise interest rates to cool off the economy.

The Dow Jones industrial average rose 184.26 points, to 10,973.65, a gain of 1.7 percent. For the week, the blue-chip index was up 259.62 points.

Broader stock indicators also were sharply higher. The Standard & Poor's 500-stock index rose 29.52, to 1327.68, and the Nasdaq composite index rose 88.32, to 2637.81.

Stocks rose after the Labor Department reported a modest rise in the producer price index, a measure of inflation pressure before it reaches the consumer.

Investors have been nervous for weeks about the possibility that Fed policymakers will raise interest rates for a second time this summer when they meet Aug. 24. There also are fears of a third rate increase this fall if the economy shows signs of overheating.

The rally was especially strong in the technology and financial services sectors.

Leading the Dow industrials were American Express, up 4-15/16, to 134-11/16; and J.P. Morgan, up 6 1/4 to 133 3/4.

On the Nasdaq Stock Market, Microsoft rose 2-15/16, to 84-11/16, and Intel advanced 3-13/16, to 79 3/4.

Recently battered Internet stocks also gained, with search engine Yahoo rising 4-7/16, to 132 13/16, and online auction firm eBay rising 6 5/8, to 98, on the Nasdaq. America Online rose 4 1/8, to 96 7/8, on the New York Stock Exchange.

Ricky Harrington, technical analyst at Wachovia Securities in Charlotte, said Wall Street will remain focused on any possible signs of inflation in the days leading up to the Fed's next meeting. Bad news, he said, could stop the market's run.

Advancing issues outnumbered declining ones by almost 2 to 1 on the NYSE. Volume totaled 691.8 million shares, down from 745.6 million on Thursday.