The latest inflation scare to grip Wall Street isn't by itself a good reason for equity investors to take cover, analysts say. Instead, they recommend looking for companies that have pricing power - the ability to pass on their higher costs to customers.

　　Costs for raw materials have been rising for a while, but signs that higher prices are starting to trickle down to consumers caused further alarm last week.

　　The dow Jones Industrials slumped 95 points on Tuesday after Federal Reserve policymakers cited a pickup in inflation pressure as they again boosted short-term interest rates.

　　A day later, the government reported the Consumer Price Index rose 0.4 percent in February as costs for everything from food and lodging to health care and education inched higher.

　　But inflation is still far from worrisome levels, said Tobias Levkovich, chief US equity strategist at Citigroup's Smith Barney division.

　　In fact, it wasn't so long ago that Wall Street was worried about deflation.

　　"We all have to kind of step back and take a deep breath, and not run to erroneous conclusions," Levkovich said. "The Fed was trying to say 'We're going to be vigilant.' They were trying to send a message to the bond market that 'We're not going to allow inflation to get out of hand.'"

　　Furthermore, Levkovich and other analysts said the perception that inflation is directly linked to soaring oil prices is off-base; energy accounts for less than 3 percent of corporate costs - a fraction of the 70 percent linked to labor. And as long as jobs and production can be outsourced, wage inflation is unlikely to become an issue.

　　"Usually you don't start to see inflation run away until it starts to get embedded into wages," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia. "In the meantime we'll see pockets of pricing power throughout the economy."

　　One of the easiest ways to get a sense of which industries have the ability to make price increases stick is to review the government's monthly CPI report, available on the Bureau of Labor Statistics Website. The 5.6 percent year-over-year increase in dairy products, for example, is a trend grocery shoppers know all too well.

　　"Food away from home" is one category on Kleintop's radar. This group rose 3.2 percent in the last 12 months. That kind of pricing power is one of the factors his firm considered before investing in food franchiser Yum Brands Inc, the parent of the KFC and Taco Bell chains.

　　(The Associated Press)