* 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, changes byline, dateline,
previous LONDON)
By Wanfeng Zhou
NEW YORK, Feb 17 (Reuters) - World stocks came off early
highs 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.
World equities measured by the MSCI All-Country World Index
<.MIWD00000PUS> last traded up 0.3 percent at 345.91. The index
had earlier climbed to its highest level since August 2008 on
strong corporate earnings.
U.S. core consumer prices rose at their quickest pace in
more than a year in January, though economists said the
increase was not strong enough to suggest a troubling build-up
in inflation pressures.
"Portfolios managers who have only just started positioning
their portfolios for higher inflation are likely to accelerate
their moves based on these increasingly higher numbers," said
Steven Neimeth, money manager at SunAmerica Asset Management In
Jersey City, New Jersey, which manages $9 billion.
A separate report showed U.S. initial claims for state
unemployment benefits increased more than expected to a
seasonally adjusted 410,000. See []
U.S. stocks opened lower. The Dow Jones industrial average
<> was down 16.04 points, or 0.13 percent, at 12,271.86.
The Standard & Poor's 500 Index <.SPX> was down 1.77 points, or
0.13 percent, at 1,334.50. The Nasdaq Composite Index <>
was down 1.96 points, or 0.1 percent, at 2,823.68.
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 0.2 percent.
MIDDLE EAST TENSIOSN
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 1.0 percent at 0.9500 Swiss francs
<CHF=EBS>, while the euro fell 0.7 percent to 1.2925 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 0.1
percent on Thursday although the market remained volatile.
U.S. crude for March delivery <CLc1> was up 8 cents at
$85.06 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, with solid demand
at a Spanish debt auction offset by broader euro zone banking
and sovereign debt concerns. It last traded up 0.1 percent at
$1.3583 <EUR=EBS>.
(Additional reporting by Edward Krudy, Karen Brettell in New
York, Lucia Mutikani in Washington and Dominic Lau in London)
