Asian Stocks Fall, Extend Global Rout, on U.S. Treasury, Intel

Nov. 13 (Bloomberg) -- Asian stocks and U.S. futures fell, extending a global rout, as the U.S. Treasury scrapped plans to buy mortgage assets, Intel Corp. cut its sales forecast and Best Buy Co. warned of a slowdown in spending.

Mitsubishi UFJ Financial Group Inc. dropped 4.4 percent as Treasury Secretary Henry Paulson shifted the focus of the government’s $700 billion bailout plan to consumer credit. Citigroup Inc. and the Standard & Poor’s 500 Financials Index slid to 12-year lows yesterday. Toshiba Corp., Japan’s largest semiconductor maker, dropped 4.8 percent after Intel lowered its fourth-quarter sales prediction by about $1 billion. Best Buy, the largest U.S. electronics retailer, lost 8 percent in New York after saying profit will decrease.

“With Paulson’s plan change, investors think the initial $700 billion won’t be enough,” Mitsushige Akino, who oversees about $468 million at Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television. “Best Buy’s forecast illustrates the dimming spending climate in the U.S.”

The MSCI Asia Pacific Index fell 3.9 percent to 83.12 at 9:28 a.m. in Tokyo. All Asian markets open for trading slumped. Japan’s Nikkei 225 Stock Average dropped 5.2 percent to 8,246.22. Australia’s S&P/ASX 200 Index declined 4.3 percent.

Futures on the Standard & Poor’s 500 Index lost 0.6 percent. Financial stocks led the gauge down 5.2 percent yesterday, leaving it less than 0.5 percent above its lowest close in five years. Europe’s Dow Jones Stoxx 600 Index sank 3.3 percent.

BHP Billiton Ltd., the world’s largest mining company, dropped 7.5 percent after oil sank to $55.43 a barrel and metals prices slumped. Exxon Mobil Corp., the biggest oil company, fell 5.1 percent in New York.

New Facility

The collapse of the U.S. mortgage market sparked $950 billion in losses and writedowns at financial companies and now threatens a global economic recession. Central banks in the U.S., U.K. and Japan are among those that have lowered benchmark interest rates to stimulate spending and growth as consumer confidence wanes.

Treasury and Federal Reserve officials are exploring a new “facility” to bolster the market for securities backed by assets, Paulson said. Officials are considering using a portion of the $700 billion financial bailout money to “encourage private investors to come back to this troubled market,” he said.

Mitsubishi UFJ, Japan’s biggest bank, lost 4.6 percent to 587 yen. Commonwealth Bank of Australia, the nation’s biggest mortgage lender, fell 5.2 percent to A$33.29 after saying bad debts may double this year.

Citigroup, Bank of America Corp., and Goldman Sachs Group Inc. dropped more than 9 percent each in U.S. trading yesterday.

“It’s hard to get away from the drumbeat of negatives,” said Liam Dalton, who oversees $1.3 billion as New York-based chief executive officer of Axiom Capital Management.

‘Significantly Weaker’

Best Buy, the largest U.S. electronics retailer, yesterday slashed its earnings forecast for the year through February, citing a “seismic” slowdown in consumer spending. The report preceded Intel’s announcement that its fourth-quarter sales will be lower than its earlier estimate by about $1 billion amid “significantly weaker” demand.

Toshiba slumped 4.8 percent to 337 yen in Tokyo. Sony Corp., the world’s second-largest consumer electronics maker, dropped 7.3 percent to 2,030 yen. Samsung Electronics Co. lost 2.8 percent to 467,000 won.

Japan’s exports to the U.S., which accounted for about a fifth of the total, fell 11 percent in September, while companies from Sony to Toyota Motor Corp. cut earnings forecasts in the past month.

Commodity Prices Slump

Energy companies on the MSCI Asia Pacific Index lost 1.4 percent as a group, while raw-material producers declined 4.4 percent collectively. Melbourne-based BHP tumbled 8.5 percent to A$25.89, while Rio Tinto Group dropped 5.1 percent to A$71.37.

Oil sank 5.3 percent to $56.16 a barrel at the close of New York trading on forecasts that tomorrow’s Energy Department report will show U.S. crude inventories grew last week amid decreased energy demand. Nickel, gasoline and crude led declines in the Reuters/Jefferies CRB Index of 19 raw materials.

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