NEW YORK - Wall Street resumed its advance yesterday as investors interpreted a government report of milder inflation as a signal that the Federal Reserve might consider cutting interest rates later this year. The Dow Jones industrial average soared more than 100 points, and posted its fifth straight weekly gain.

Investors were encouraged after the Labor Department's producer price index - which measures the rate of inflation experienced by manufacturers when they purchase goods - suggested that inflation was moderating. This raised hopes on Wall Street that central bankers wouldn't need to hike interest rates to keep the economy in check, and might even lean toward lowering them.

With corporate earnings reports slowing, the market has put more weight on economic data to help find a direction. The fresh batch of economic reports could help assure central bankers that they have navigated the economy toward a soft landing in which growth slows enough to restrain inflation.

The stronger economic news, especially about inflation, injected a new dose of confidence that central bankers can now begin to mull a rate cut. It also helped reignite a rally stopped short Thursday after retail sales reports dimmed expectations about consumer confidence.

"To some degree, the advance is in reaction to the sharp selling on Thursday," said Richard Cripps, chief market strategist for Stifel Nicolaus. "The market was due for a blow-off, and I think the data you got this morning don't get in the way of the positive trend under way. A fair amount of investors want to be in the market."

The Dow advanced 111.09, or 0.84 percent, to 13,326.22 - the biggest point rise so far this month. The index gained back most of the nearly 150 points it lost Thursday. It had reached a record Wednesday, its 21st record close since the start of the year and 43d since the beginning of October.

Broader stock indicators also advanced. The Standard & Poor's 500 index rose 14.38, or 0.96 percent, to 1,505.85, and the Nasdaq composite index rose 28.48, or 1.12 percent, to 2,562.22.

The Dow, which passed 13,300 for the first time Monday, rose 0.46 percent for the week. The S&P 500 gained 0.02 percent for the week, and the Nasdaq fell 0.39 percent.

Treasury investors did not appear to believe that the producer price data significantly raised the possibility of a rate cut. Bond prices fell, paring earlier gains after investors shrugged off the PPI and refocused on the rising stock market.