Japan stocks declined, led by financial companies, on concern the
nation's drop into recession will lead to an increase in bad-loan costs.
Mitsubishi
UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc.
dropped more than 6 percent on reports they'll sell shares to replenish
capital sapped by bad loans and share losses. Aiful Corp. led a slump
by consumer lenders after Nikko Citigroup Ltd. said interest-refund
claims are rising. Mitsubishi Corp. fell to a four-year low on
speculation commodity demand in emerging markets will slow. Softbank
Corp., a mobile carrier that's lost half its value this year, rose 5.6
percent.
The Nikkei 225 Stock Average lost 55.19, or 0.7 percent,
to 8,273.22. The broader Topix index slipped 8.01, or 1 percent, to
827.43 in Tokyo, the lowest close since Oct. 28. The value of stocks
traded in Tokyo retreated for a fourth day, sliding to the lowest level
since Sept. 1.
The Topix has fallen 44 percent this year as the
collapse of the U.S. mortgage market prompted banks to tighten lending,
pushing corporate bankruptcies to a five-year high. About a quarter of
shares on the gauge trade at less than half of their book value,
according to Bloomberg data.
Mitsubishi UFJ yesterday posted a 61
percent drop in net income for the three months to Sept. 30, citing
mounting losses on stockholdings and increased costs to get rid of bad
loans. The bank said it will raise as much as 546 billion yen ($5.64
billion) through a share sale.
European stocks fell,
pushing the Dow Jones Stoxx 600 Index to the lowest level since May
2003, as concern deepened the economic slowdown will cut profits for
chemical companies, financial firms and commodity producers.
BASF
SE, the world's largest chemical company, tumbled 14 percent after
abandoning its profit target. UBS AG slumped 9 percent as Morgan
Stanley slashed its estimate for the Swiss bank's earnings by 23
percent, citing the possibility of more writedowns. SSAB AB, Sweden's
largest steelmaker, slid 16 percent after saying deliveries will drop
in the fourth quarter.
The Stoxx 600 lost 4 percent to 193.77,
extending this year's drop to 47 percent. More than $31 trillion has
been erased from the value of global equities as financial-market
turmoil pushes countries from Europe to the U.S. and Japan into
recession.
U.S. stocks fell and the Standard & Poor's
500 Index slid below its lowest close since 2003 on growing concern
over the fate of the nation's car industry and economic data signaling
the recession is deepening.
General Motors Corp. tumbled 15
percent and Ford Motor Co. lost 25 percent as auto executives pleaded
to Congress for federal aid. JPMorgan Chase & Co., Cisco Systems
Inc. and General Electric Co. helped lead declines after government
reports showed consumer prices decreased by the most on record and
housing starts sank to an all-time low. Citigroup Inc. slid 9.6 percent
on the fifth-biggest U.S. bank's plan to buy $17.4 billion of assets
from structured investment vehicles it advises.
The S&P 500
slipped 2.9 percent to 833.98 at 12:45 p.m. in New York. The Dow Jones
Industrial Average lost 163.76 points, or 1.9 percent, to 8,260.99. The
Nasdaq Composite Index decreased 3.3 percent to 1,434.49. Almost 11
stocks fell for each that rose on the New York Stock Exchange.
JPMorgan,
the largest U.S. bank by market value, tumbled 7.9 percent to $29.60.
Cisco, the biggest maker of networking equipment, retreated 5.1 percent
to $15.62. GE, the largest maker of power-generation equipment, fell 95
cents, or 5.9 percent, to $15.11.
Citigroup, which was surpassed by
US Bancorp today as the nation's fourth-largest bank by market value,
retreated 81 cents to $7.55, its lowest price since September 1995,
three years before Citicorp Inc.'s merger with Sanford ``Sandy''
Weill's Travelers Group Inc.