* US stocks down after higher than expected inflation data
* Oil prices dip after hitting 28-month high on Wednesday
* Middle East unrest boosts safe-haven franc, Treasuries
(Updates prices, adds comment, details)
By Wanfeng Zhou
NEW YORK, Feb 17 (Reuters) - U.S. and European shares fell
on Thursday after the United States reported
higher-than-expected inflation and jobless claims, while the
Swiss franc extended a prior session rally on concerns about
Middle East tensions.
U.S. core consumer prices rose at their quickest pace in
more than a year in January, though some economists said the
increase was not strong enough to suggest a troubling build-up
in inflation pressures.
"The rise in CPI wasn't that huge, but in this environment
everyone is hyper-sensitive to any inflation," said T.C.
Robillard Jr., senior research analyst at Signal Hill in
Baltimore. "Even being a touch higher will have the inflation
hawks nervous."
The Dow Jones industrial average <> was last down 11.31
points, or 0.09 percent, at 12,276.59. The Standard & Poor's
500 Index <.SPX> was down 1.96 points, or 0.15 percent, at
1,334.26. The Nasdaq Composite Index <> was down 3.01
points, or 0.1 percent, at 2,822.15.
A separate report showed U.S. initial claims for state
unemployment benefits increased more than expected to a
seasonally adjusted 410,000. See []
European shares also fell in afternoon session after U.S.
inflation and jobs data. The FTSEurofirst 300 <> index of
leading European shares last traded down 0.3 percent.
World equities measured by the MSCI All-Country World Index
<.MIWD00000PUS> last traded up 0.25 percent at 345.80. The
index had earlier climbed to its highest level since August
2008 on strong corporate earnings.
SAFE HAVEN SHINES
Bahrain police stormed a square in Manama, killing at least
three people as protests in the Middle East and North Africa,
inspired by revolts in Tunisia and Egypt, gathered pace.
[]
The political tensions boosted the appeal of safe-haven
assets such as the Swiss franc and U.S. government debt.
The U.S. dollar was down 1 percent at 0.9497 Swiss francs
<CHF=EBS>, while the euro fell 0.8 percent to 1.2915 francs
<EURCHF=EBS>.
"If events in the Middle East do escalate we will see safe
haven flows which will help the Swiss franc, but equities are
still holding up for now," said Kenneth Broux, market economist
at Lloyds.
Unrest spreading across the oil-rich Middle East and North
Africa had pushed London Brent crude prices <LCOc1> to a
multi-month high of $104.52 a barrel, but they dipped 0.3
percent on Thursday in volatile trading.
U.S. crude for March delivery <CLc1> was up 4 cents at
$85.03 a barrel,
U.S. Treasury prices rose. Benchmark ten-year notes
<US10YT=RR> were last up 11/32 in price to yield 3.59 percent,
down from 3.62 percent on Wednesday.
The euro edged higher versus the dollar as solid demand at
a Spanish debt auction offset broader euro zone banking and
sovereign debt concerns. It last traded up 0.2 percent at
$1.3598 <EUR=EBS>.
(Additional reporting by Edward Krudy, Karen Brettell in
New York, Lucia Mutikani in Washington and Dominic Lau in
London)
(Editing by Theodore d'Afflisio)
