Japanese stocks slumped, sending the Nikkei 225 Stock Average below
8,000 for the first time in four weeks, as the deepening global
recession eroded earnings at insurers and prompted the fastest drop in
exports in seven years.
Tokio Marine Holdings Inc., Japan's
largest casualty insurer, plunged 15 percent after it and six listed
peers cut profit forecasts as shareholdings plunged. Isuzu Motors Ltd.,
which generates a third of its sales in Asian markets, lost 17 percent
after slashing payrolls to cope with lower overseas demand. Mitsubishi
Corp., Japan's biggest trading company, plummeted 13 percent as
commodities retreated.
The Nikkei 225 dropped 570.18, or 6.9
percent, to close at 7,703.04 in Tokyo, the lowest since Oct. 28 and
the 10th steepest decline since 1970. The broader Topix index slid
45.15, or 5.5 percent, to 782.28.
European stocks
slumped, sending the Dow Jones Stoxx 600 Index to the lowest level
since 2003, after the highest U.S. jobless claims since 1992 heightened
concern corporate profits will crumble as the global recession deepens.
BHP
Billiton Ltd. and Royal Dutch Shell Plc sank more than 5 percent as the
unexpected rise in filings for unemployment benefits and retreat in a
gauge of leading U.S. economic indicators dragged oil below $50 a
barrel. Deutsche Bank AG and ING Groep NV dropped more than 8 percent
after Citigroup Inc.'s plan to buy troubled investment-fund assets
fueled speculation of more bank writedowns.
The Stoxx 600 declined
3.6 percent to 186.75, the lowest closing level since April 2003. More
than $32 trillion has been erased from the value of global equities
this year as the financial-market turmoil pushes countries from the
U.K. to the U.S. and Japan into recession.
Shell, Europe's largest
oil company, lost 5.4 percent to 1,508 pence. Total SA, the region's
third-largest, retreated 4.4 percent to 37.335 euros.
Crude for
December delivery fell as much as $3.87, or 7.2 percent, to $49.75 a
barrel in New York, dropping below $50 for the first time in almost two
years.
Rio Tinto Group, the world's third-largest mining company,
dropped 10 percent to 2,022 pence. BHP, the biggest, slid 8.7 percent
to 752.5 pence.
Copper fell 3.1 percent in London on concern supply
may outpace demand as a global economic slowdown damps demand for raw
materials.
Deutsche Bank, Germany's biggest, dropped 9.4 percent to
19.37 euros. ING, the largest Dutch financial-services provider,
slipped 8.9 percent to 5.72 euros.
U.S. stocks swung
between gains and losses as prospects that lawmakers will agree on a
plan to rescue the auto industry offset a jump in jobless claims.
General
Motors Corp. rallied as much as 43 percent, reversing a 39 percent
slide that sent the largest U.S. carmaker to its lowest price since
1938, after an aide to Democratic Senator Carl Levin said a compromise
has been reached. Ford Motor Co. jumped 21 percent for its steepest
advance since at least 1980.
Stocks climbed from their lows of the
day after the S&P 500 dropped to 776.76, matching the lowest close
during the bear market that followed the dot-com bubble. The benchmark
index for American equities lost 43 percent this year, with the earlier
decline leaving it poised for its worst year ever.
The earlier
retreat today came after jobless claims jumped to the highest level
since 1992 and costs for protection against corporate defaults surged
to a record on concern one of Detroit's automakers would be forced into
bankruptcy.
GM jumped $1.16 to $3.95, while Ford added 52 cents to
$1.78. JPMorgan Chase & Co. and Citigroup Inc. pared declines of 18
percent and 25 percent in half.