Asian Stocks End Lower: Nikkei Dips 2.4%

Stocks in Asia closed lower Wednesday after data showed the recession in the U.S. was deepening.
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Updated from 12:06 a.m. EST

Asian stocks closed lower Wednesday in light trading after downbeat data about the U.S. economy showed the recession in the U.S. was deepening.

Japan's Nikkei 225 stock average finished down by 2.4% to 8517.10.

Japan's Cabinet on Wednesday approved a budget proposal that, if passed by lawmakers, will push spending to record levels as the country battles a rapidly worsening recession.

The Finance Ministry's draft budget consists of a spending increase of 6.6% to 88.5 trillion yen ($990.9 billion) for the next fiscal year -- the biggest ever figure in an initial proposal.

The Hang Seng index in Hong Kong fell 0.3% and South Korea's Kospi fell 1.4%. The S&P/ASX 200 index in Australia, however, gained 1.4%.

Shares in

Toyota

(TM) - Get Report

tumbled 4% in its first trading day after reporting Monday that it expected to post its first operating loss in almost 70 years. Markets in Japan were closed Tuesday. Others Automakers across the region were hit with heavy selling as well.

Many investors found little reason to buy after reports released overnight in the U.S. showed no signs of a turnaround in the world's largest economy, already in recession.

The U.S. government said third-quarter gross domestic product fell at an annual rate of 0.5%. The hard-hit housing sector also continued to deteriorate. New home sales weakened last month to the slowest pace in nearly 18 years, and prices of new homes dropped by the biggest amount in eight months.

The FTSE 100 index in London fell 0.2% in early trading. The DAX in Frankfurt was closed.

Premarket futures in the U.S. were indicating a mixed opening for stocks Wednesday on Wall Street in an abbreviated holiday trading session.

On Tuesday, stocks on Wall Street surrendered early gains to close with losses as investors digested more dim economic data.

The

Dow Jones Industrial Average

sank 100.28 points, or 1.2%, to 8419.49, and the

S&P 500

lost 8.47 points, or 1%, to 863.16. The

Nasdaq

slipped 10.81 points, or 0.7%, to 1521.54.

Many markets across Asia will be closed Thursday for Christmas, including Hong Kong, Singapore and Australia. Japan's stock market, however, will be open.

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