Stocks stumble on inflation, growth worries

Stocks stumble on inflation, growth worries

NEW YORK: US stocks dropped for the fourth straight day on Friday and European stocks mostly fell amid renewed fears about inflation and ebbing growth. Investor sentiment took a hit from news the UK economic recovery slowed sharply in July, growing by just 0.1 percent as rising COVID cases and supply shortages offset the end of lockdown curbs.

In the United States, government data showed producer price inflation (PPI) over the latest 12 months hit a record 8.3 percent in August. That unnerved markets, and all three major Wall Street indexes closed lower for the week. “This is part of a recent trend downward in the market, probably fueled by the Delta variant and the potential for slowing,” said Jack Ablin of Cresset Capital.

Ablin said the PPI spike “shows a fair amount of pricing pressure. And I think that caused some concern among investors,” as it could push the Federal Reserve to tighten monetary policy sooner.

US consumer price index (CPI) data is due out next week, and Michael Hewson, chief market analyst at CMC Markets UK said, “It would be rather odd if some of these price rises didn’t start to trickle down into the headline CPI rate.” London ended the