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Asian Stocks Finish Mostly Lower

The Associated Press

TOKYO -- Asian stocks ended mostly lower Wednesday with burgeoning optimism about a global economic recovery punctured by weak U.S. data.

Lethargic financial and tech shares dragged down the region's major markets including Tokyo, spoiling expectations for a sustained regional rally. Investors eager for good news may have jumped the gun in driving up prices recently, analysts said.

Wall Street on Tuesday shifted into reverse after the U.S. government reported a 1.1% slump in retail sales in March, an unexpectedly poor result that rattled hopes that the worst of the recession had passed. Investors watch retail sales trends closely as a barometer of consumer spending, which makes up two-thirds of the world's largest economy.

The sales data, combined with a sharp drop in wholesale prices, came just as the corporate earnings season got under way. The Dow Jones Industrial Average lost nearly 140 points.

Francis Lun, general manager at Fulbright Securities in Hong Kong, said investors are now focused on company results out of the U.S., particularly from banks.

"The market is prepared for (General Motors'(GM Quote)) funeral march, so we won't be surprised (by that)," Lun said. "The important thing is really for the banks to recover. If the banks can report strong first-quarter results, then I think it'll be OK."

But even then, he added, investors are "still worried that the economic data from the U.S. is still too bad."

Japan's benchmark Nikkei 225 stock average lost 1.1% to end at 8,742.96, while Hong Kong's Hang Seng index rose about 0.6%.

Stock measures in South Korea and Australia closed lower, while stocks in Shanghai rose.

A murky outlook from Intel (INTC Quote)Tuesday, as well the yen's climb against the dollar, sent tech shares lower around Asia.

Intel reported first-quarter net income of $647 million. The figure was less than half what the company earned in the same period last year but beat analysts' expectations for far worse. The chipmaker claimed personal computers sales had "bottomed out" but it unnerved investors by not giving specific revenue guidance.

In Tokyo, Advantest(ATE Quote), which makes memory chip testing equipment, shed 4% and Tokyo Electron lost 4.6%. South Korea's Samsung Electronics fell 1.2%.

Financial issues also took a big hit as investors moved to lock in profits after recent gains.

Nomura Holdings(NMR Quote), Japan's biggest securities company, plunged 7.7%.

On Tuesday in the U.S., the Dow closed down 137.63, or 1.7%, at 7,920.18.

Broader measures also lost ground after three days of gains. The S&P 500 index fell 17.23, or 2%, to 841.50, and the Nasdaq composite index fell 27.59, or 1.7%, to 1,625.72.

Wall Street futures pointed to a lower open on Wednesday.

Stocks in London rose slightly, while trading was lower in Frankfurt and Paris.

Oil prices hovered above $49 a barrel Wednesday in Asia as the unexpected drop in U.S. retail sales suggested crude demand could remain weak amid the worst recession in decades.

Benchmark crude for May delivery rose 37 cents to $49.78 a barrel in electronic trading on the New York Mercantile Exchange. The contract on Tuesday fell 64 cents to settle at $49.41.

In currencies, the dollar fell to 98.88 yen from 98.98 yen.