Japan's stocks plunged to a near four-year low after a U.S.
bank-rescue package was rejected, unemployment rose and production
slumped, raising concern the financial crisis is hurting global growth.
Sumitomo
Mitsui Financial Group Inc., Japan's third-biggest listed bank, and
Nomura Holdings Inc., the largest brokerage, sank more than 7 percent.
JFE Holdings Inc. dived 7.3 percent, leading steelmakers to the lowest
in three years on speculation a slowing economy will sap demand.
The
Nikkei 225 Stock Average declined 483.75, or 4.1 percent, to close at
11,259.86 in Tokyo. The broader Topix index fell 40.46, or 3.6 percent,
to 1,087.41, the lowest since December 2004. All 33 industry groups on
the Topix slumped.
The U.S. House of Representatives voted yesterday
to reject a $700 billion rescue package for the financial system,
sparking the biggest drop in the Standard & Poor's 500 Index since
the October 1987 crash. Treasury Secretary Henry Paulson said he'll
work to salvage the plan that would give him the authority to buy bad
loans from financial companies.
Japan's unemployment rate rose to
the highest in two years in August while industrial production fell at
the fastest pace in five years, the government said today, signaling
the reach of the economic slowdown to households and manufacturers.
The
Topix slumped 13 percent in September, its worst month since November
1993. The gauge is down 40 percent from a 15-year high in February
2007. The Nikkei fell 14 percent this month, its steepest slide in a
decade.
JFE, the world's third-largest steelmaker, tumbled 7.3
percent to 3,180 yen, while bigger rival Nippon Steel Corp. retreated
6.3 percent to 387 yen. A gauge of steelmakers declined 4.9 percent to
the lowest since September 2005.
Japan's Ministry of Economy, Trade
and Industry yesterday said domestic demand for crude steel will
probably drop in the three months to Dec. 31, the first quarterly
decline since December 2005.
European stocks rebounded from
their steepest drop in eight months after U.S. lawmakers said they plan
to salvage a $700 billion bank-rescue bill.
Standard Chartered
Plc gained 8 percent and HSBC Holdings Plc added 4.2 percent as
congressional leaders said a bailout deal would eventually pass after
its rejection yesterday sparked a 7 percent drop in the MSCI World
Index. Dexia SA climbed 6.1 percent after the largest lender to local
governments got a 6.4 billion-euro ($9.2 billion) state-backed bailout.
Anglo Irish Bank Corp. Plc rallied 67 percent as the government
guaranteed the deposits and borrowings of six Irish lenders.
Standard
Chartered, the U.K. bank that gets most of its profit from Asia, gained
8 percent to 1,345 pence. HSBC, Europe's biggest bank, added 4.2
percent to 901 pence.
Christopher Dodd, chairman of the Senate Banking Committee, said senators may deal with the bill as early as tomorrow.
Democratic
presidential candidate Barack Obama called for calm after the House
vote, saying the plan ``will get done.'' Republican nominee John McCain
urged lawmakers to ``go back to the drawing board'' and come up with
legislation that will pass.
The Stoxx 600 fell 11 percent in
September, the worst monthly slump since January, after Lehman Brothers
Holdings Inc. filed for bankruptcy, American International Group Inc.
was taken over by the U.S. Treasury and Washington Mutual Inc. was
seized by regulators in the biggest U.S. bank failure in history.
U.S.
stocks rallied as growing expectations that lawmakers will salvage a
$700 billion bank- rescue package helped the Standard & Poor's 500
Index recover more than half of yesterday's 8.8 percent plunge.
JPMorgan
Chase & Co., Citigroup Inc. and Bank of America Corp. jumped more
than 13 percent as Senate leaders vowed to resume work on the bailout
plan this week after its rejection spurred the S&P 500's biggest
decline in two decades. Hess Corp. and Schlumberger Ltd. added more
than 6 percent as optimism about the plan helped oil rebound from a
$10-a-barrel drop.
Even with the advance, the S&P 500 is
poised for its worst month since 2002, with a decline of 10 percent,
and is down 9.9 percent for the quarter. The cost of borrowing dollars
overnight rose the most on record as banks hoarded cash after the
defeat of the bailout plan by Congress.
The Dow average has lost
6.8 percent in September, and the Nasdaq is down 13 percent. The
S&P 500's retreat since the end of June is its fourth-straight
quarterly decline, the longest stretch since 2001. The Dow has slipped
5.4 percent and the Nasdaq is down 9.8 percent.
Financial
companies in the S&P 500 this month traded at 1.1 times their book
value, the lowest valuation since Bloomberg began tracking the data in
1995. Commercial banks in the gauge trade at 0.8 times book value, also
a 13-year low.
JPMorgan, the biggest U.S. bank by deposits, climbed
13 percent to $46.25. Citigroup rose 18 percent to $20.86. Bank of
America surged 13 percent to $34.30. Goldman Sachs Group Inc. increased
7 percent to $129.09 and Morgan Stanley gained 18 percent to $24.50.