Friday: Weak PPI Propels Stock Prices Higher - TheStreet

Back to normal.

All the indexes were broadly higher with traders pointing to a flurry of roseate inflation reports. The

Producer Price Index

, which measures wholesale prices, fell 0.4% for February -- the biggest drop in more than two years. Economists had been expecting the indicator to be unchanged.

Traders figure the good news means the

Federal Reserve

, which meets later this month to talk about interest rates, will leave things alone. Low rates mean companies can borrow more cheaply, which in turn beefs up their bottom lines.

As happy traders shuffled out of their offices for a quick slice of Friday pizza, the

Dow Jones Industrial Average

was up more than 50 points and above 6930.

But economists were less exuberant than stock traders. Fred Sturm, chief economist at

Fuji Securities

in Chicago, says the Fed knows that by the time inflation starts to show up in official indexes, they'll already have a problem on their hands. So while the Fed is off the hook on March 25, Sturm believes a pre-emptive rate hike is on the way.

"Skepticism is warranted," Sturm says. "But there's a peculiar whistling-past -the-graveyard-attitude in the stock market."

Tech shares bucked the positive trend, even as analysts raised ratings on some of the most recognized names.

Disk maker

Quantum

(QNTM)

fell 1 5/8 to 38 5/8 and

Western Digital

(WDC) - Get Report

fell 2 7/8 to 60 1/4 after

Smith Barney

upgraded the pair. Networker

Fore Systems

(FORE)

fell 1 1/4 to 22 3/4.

Cascade Communications

(CSCC)

slipped 2 1/8 to 26 5/8, while

Cisco

(CSCO) - Get Report

dropped 1 1/2, 50 1/2.

And in keeping with the lunch-time theme, a little burger news.

Burger King

's British parent,

Grand Metropolitan

(GRM)

, has fired the burger chain's chief executive just two weeks after

McDonald

's

(MCD) - Get Report

launched a price-cutting campaign.

After two years wearing the crown, Robert Lowes, will be replaced by Dennis Malamatinas, a

Procter & Gamble

(PG) - Get Report

and

PepsiCo

(PEP) - Get Report

veteran.

Burger King has announced that it does not plan to enter a price war with its chief rival, McDonald's. And Grand Met has given no indication the No. 2 burger chain will change its policy under new leadership.

Have it your way.

By Andrew Morse

amorse@thestreet.com