Asian
stocks fell for a third week, ending the regional benchmark's worst
first half in 16 years, as record oil prices dimmed earnings prospects
and concern grew that credit market losses haven't reached an end.
Toyota
Motor Corp., the world's second-largest automaker, led declines after
saying surging gasoline prices may crimp demand for cars. Mitsubishi
UFJ Financial Group Inc. fell as Citigroup Inc. prepared to cut jobs
and UBS AG forecast the U.S. bank will write down more assets. Brambles
Ltd., the world's largest supplier of industrial pallets, advanced in
Australia after saying it expects ``solid'' profit growth.
Japan's
Nikkei 225 Stock Average sank 2.9 percent this week to 12,544.36,
extending its losing streak to a seventh day, the longest since
November. New Zealand's NZX 50 Index fell to its lowest since December
2005, dropping 1.7 percent to 3,226.91 after the economy shrank in the
first quarter, putting the country on the brink of its first recession
in 10 years.
U.S. stocks tumbled on June 26, sending the
Dow Jones Industrial Average to its worst June since the Great
Depression, as higher oil, credit-market writedowns and a slowing
economy threatened to extend a yearlong profit slump.
Toyota,
the world's second-largest carmaker, tumbled 6.3 percent to 5,070 yen
this week. The company said it may cut its 2008 sales target to reflect
slowing demand in the U.S. Hyundai Motor Co., South Korea's largest
automaker, fell 7.3 percent to 72,500 won this week.
Automakers
also fell after Japan's May core consumer prices climbed 1.5 percent
from a year earlier after rising 0.9 percent in April. Crude oil
surpassed $141 for the first time as a weaker dollar spurred investment
in commodities.
Matsushita Electric Industrial Co., the
world's largest consumer-electronics maker, lost 4.6 percent to 2,295
yen this week. Samsung Electronics Co., Asia's biggest mobile-phone
maker, slid 3.7 percent to 643,000 won, the lowest since April 1, after
Goldman Sachs Group Inc. said second-quarter operating profit will be
``weaker than expected'' and cut its price estimate by 3.2 percent.
European
stocks fell, heading for the worst first half since at least 1987, as
investors speculated record oil prices and higher borrowing costs will
erode earnings.
Daimler AG and Renault SA retreated
after crude topped $142 a barrel. Carrefour SA declined as Europe's
biggest retailer cut its sales outlook, while Ericsson AB slumped after
its mobile- phone venture with Sony Corp. scaled back forecasts for the
second time this year. Barclays Plc and Deutsche Bank AG slipped as
analysts said the banks may need more capital.
Analysts
have slashed earnings estimates as confidence in the economy wanes.
Earnings for companies in the Stoxx 600 are projected to fall 0.5
percent this year, down from 11 percent growth forecast at the end of
2007, according to data compiled by Bloomberg.
European
business confidence dropped more than economists forecast this month,
indicating the economy is continuing to cool, the European Commission
said today.
``It could get worse before it gets better,''
Lucy MacDonald, London-based chief investment officer of global
equities at RCM Ltd., which has $100 billion, said in a Bloomberg
Television interview. ``There is more concern about growth generally,
inflation and no help from interest rates. Weakness is going to be more
widespread.''
National indexes declined in 14 of the 18
western European markets. France's CAC 40 fell 0.7 percent, and
Germany's DAX slipped 0.6 percent. The U.K.'s FTSE 100 added 0.2
percent.
European Central Bank council member Yves Mersch
said the bank will do whatever is needed to contain inflation in the
15- nation euro region. ECB President Jean-Claude Trichet reiterated on
June 25 that policy makers may raise their key rate from a six-year
high next month to curb price increases.
Fed policy makers kept rates unchanged this week, saying ``upside risks'' to prices have increased.
Stocks
pared losses after a report showed consumer spending rose in the U.S.
more than analysts estimated in May as tax rebates propelled the
biggest gain in incomes almost three years.
Daimler, the
world's second-largest maker of luxury cars, slipped 2.9 percent to
39.88 euros. Renault, France's second- biggest carmaker, dropped 2.7
percent to 51.49 euros.
Oil climbed as much as $2.62, or
1.9 percent, to $142.26, after jumping more than $5 yesterday, as a
weaker dollar spurred investment in commodities. Oil has soared almost
50 percent in 2008. Goldman Sachs Group Inc. analyst Arjun N. Murti
estimates it may rise to between $150 and $200 a barrel within two
years.
Total SA, Europe's largest oil refiner, climbed 2
percent to 52.91 euros. Royal Dutch Shell Plc, the region's biggest oil
producer, advanced 1.5 percent to 2,015 pence.
BHP
Billiton Ltd., the world's largest mining company, added 3.7 percent to
1,875 pence. Anglo American Plc, the second- biggest, jumped 2.8
percent to 3,396 pence.
Gold rose to the highest in a
month as record energy costs boost demand for the precious metal as a
hedge against inflation. Silver also gained.
Carrefour
dropped 7.8 percent to 34.91 euros as it said operating profit will
increase at about the same pace as sales this year, six weeks after
saying earnings would exceed the pace of revenue growth.
European
retail sales plunged in June as soaring fuel and food prices hit
consumers' budgets, prompting stores to cut jobs and lose confidence
about their prospects, the Bloomberg purchasing managers index showed.
U.S.
stocks slumped last week, pushing the Dow Jones Industrial Average to
the brink of a bear market, on mounting concern that writedowns and
record oil prices will keep eroding profit and economic growth.
JPMorgan
Chase & Co., Citigroup Inc. and Bank of America Corp. led financial
stocks in the Standard & Poor's 500 Index to the fourth week of
declines, the longest streak since 2005. Goldman Sachs Group Inc.
recommended investors sell bank shares because credit losses will
linger into 2009. United Parcel Service Inc. fell the most since July
2006 after saying profit will miss its prior forecast because fuel
costs and an ``anemic'' economy reduced demand for air shipments.
The
Standard & Poor's 500 Index dropped 3 percent to 1,278.38, a
three-month low. The Dow average retreated 4.2 percent to 11,346.51 and
needs to fall another 0.1 percent to complete a bear-market decline of
20 percent from its October record. The Nasdaq Composite Index lost 3.8
percent to 2,315.63.
``The market is dealing with anxiety
about further losses and also coming to grips that we're in a
significantly slower period of economic growth,'' said Kevin Cronin,
Boston-based head of investments at Putnam Investments, which manages
$180 billion. ``People thought the worst was behind us.''
Nine
out of 10 S&P 500 industries fell this week, giving the index an
8.7 percent plunge in June. That's the steepest monthly slide since
September 2002. Analysts forecast earnings at companies in the S&P
500 will slump 11 percent on average in the second quarter, according
to a Bloomberg survey yesterday, compared with a projected decline of
8.9 percent a week earlier.