Concerns over the U.S. financial sector threatened to pressure stocks for a second day on Tuesday.

In today’s economic news, U.S. producer prices soared unexpectedly at their highest annual rate in 27 years last month as rising wholesale prices for energy spread to a variety of products.

The producer price index for finished goods jumped 1.2% on a seasonally adjusted basis in July, the U.S. Labour Department said. It soared 9.8% from the previous year, the highest annual increase since June 1981. The core index, which excludes food and energy, climbed 0.7% last month and rose 3.5% from a year ago, a 17-year high.

Meanwhile, U.S. housing starts fell 11%, reversing a rise in June. Housing starts decreased 11% in July to a seasonally adjusted 965,000 annual rate, the U.S. Commerce Department said.

Here at home, current dollar wholesale sales rose 2% to $45.2 billion in June, the fifth increase in six months. After removing the effect of price changes, sales in constant dollars increased 1% during the month, Statistics Canada said.

The Canadian dollar opened at US93.86¢, down one-tenth of a cent.

In today’s earnings news, Home Depot posted a 24% decline in quarterly net, reflecting continued pressure in the housing markets. However, the retailer kept its full-year outlook unchanged.

Crude-oil prices declined Tuesday. The front-month September contract on the New York Mercantile Exchange fell 75¢ to US$112.12 a barrel as concerns about global demand depressed futures.

Overseas, The Bank of Japan held interest rates steady, but downgraded its assessment of the domestic economy, describing it as “sluggish” for the first time in 10 years.

Japan’s Nikkei stock average fell 2.28%.

In morning trading, Britain’s FTSE 100 fell 1.44%, Germany’s DAX index lost 1.3%, and France’s CAC-40 fell 1.62%.

On Monday, the benchmark index of the Toronto Stock Exchange finished slightly higher as a rise in resource shares offset credit worries in the United States.

The S&P/TSX composite index rose 22.67 points, or 0.17%, to end at 13,119.37. Five of the 10 TSX main groups finished higher.

The junior S&P/TSX Venture composite index dropped 13.69 points, or 0.71%, to end at 1,923.64.

In New York, U.S. stocks sank on Monday as the prospect of more losses from the mortgage crisis hurt the shares of banks and the two biggest home finance providers.

Fannie Mae and Freddie Mac shed more than 20% each after Barron’s reported that the U.S. Treasury may need to bail out the home finance giants.

The Dow Jones industrial average tumbled 180.51 points, or 1.55%, to 11,479.39. The S&P 500 lost 19.60 points, or 1.51%, to 1,278.60. The tech-heavy Nasdaq composite index fell 35.54 points, or 1.45%, to 2,416.98.