US stocks open lower as producer prices soar

By Ovunc Kutlu

ANKARA (AA) - US stocks opened with losses on Thursday as producer prices in July increased much higher than estimates, intensifying investors' worries about rising inflation.

The Dow Jones plummeted 40 points to 35,441 at the opening bell before recovering to 35,489 at 9.46 a.m. EDT.

The S&P 500 was off 4, or 0.1%, to 4,443 points and the Nasdaq lost 45, or 0.3%, to 14,719.

US producer prices soared 7.8% in July on an annual basis, much higher than the market estimate of 7.3%, the US Labor Department said Thursday.

Core producer prices, which exclude food and energy, jumped 6.2% year-on-year, while market consensus was 5.6%.

The increase caused the dollar index to climb above the critical level of 93 once again. The yield on 10-year US Treasury notes added 1.% to 1.372.

The VIX volatility index, known as the fear index, increased 1.2% to 16.25.

Despite rebounding Wednesday from recent losses, precious metals were down again. Gold shed 0.2% to $1,748 per ounce and silver declined 1.4% to $23.22.

Oil prices also showed slight losses with Brent crude losing 0.2% to $71.27 per barrel and West Texas Intermediate stood at $69.03 -- a 0.3% loss.

Despite pessimism in US markets, European indices were in positive territory, except for the UK.

London's FTSE 100 was down 25, or 0.34%, to its daily low of 7,194 points at 1353 GMT despite hitting an all-time high of 7,220.70 earlier in the day.

STOXX Europe 600, which includes around 90% of the market capitalization of the European market in 17 countries, also posted a record high of 475.13, but it was trading at 474.69.

Germany DAX 30 and France's CAC 40 also hit records of 15,964.38 and 6,891.29, respectively, and they were trading close to those levels.

Italy's Borsa Italiana saw an all-time high of 26,574.91 points and IBEX 35 was up 0.2% to 8,994.

Major stock markets in Asia closed with losses to end their three-day winning streak.

The Asia Dow lost 19 points, or 0.48%, to close at 3,909. Tokyo's Nikkei 225 stock exchange fell by 55, or 0.2%, to 28,015 points.

The Hang Seng, the benchmark for blue-chip stocks trading on the Hong Kong stock exchange, plummeted 142 points, or 0.53%, to 26,517.

China's Shanghai stock exchange was down 7 points, or 0.22%, to 3,524 points.