Japan Stocks Fall as Developer Default Sparks Financial Concern
Japan's stocks fell, sending the benchmark index to its longest losing streak this year, on mounting doubts about the financial health of developers and consumer-finance companies.
Mitsui Fudosan Co. sent real-estate companies lower after a smaller rival filed for bankruptcy, while consumer lender Aiful Corp. tumbled to the lowest in a decade. Central Japan Railway Co. led a surge in train lines on speculation they'll benefit from a shift to fuel-efficient transportation amid rising oil prices.
Suruga Corp., a Yokohama-based condominium developer, filed for bankruptcy protection yesterday, with debt at four times its capital. The stock tumbled 40 percent to 121 yen, less than a 10th of its value at the end of 2007.
Mitsui Fudosan, the nation's largest developer, dropped 1.5 percent to 2,350 yen. Rival Mitsubishi Estate Co. lost 2.2 percent to 2,500 yen, while Sumitomo Realty & Development Co. fell 2.8 percent to 2,230 yen.
Urban Corp., a developer that had its debt cut to a speculative level earlier this month, fell 15 percent to 358 yen, the lowest since September 2004.
Aiful, Japan's largest consumer finance company by assets, may be insolvent on a parent basis, Lehman Brothers Holdings Inc. said on June 23. The shares plummeted 11 percent to 1,345 yen, extending yesterday's 5.9 percent drop, to the lowest since Aiful's Tokyo listing in 1998. Rival Takefuji Corp. plunged 7.5 percent to 1,611 yen after UBS AG cut its 12-month price estimate by a third.
Consumer-finance companies were the biggest losers among 33 industry groups on the Topix, followed by developers.
Japan's monthly wages fell six times in the past 12 months to April 30, according to figures compiled by the Labor Ministry, and household spending fell the most in 19 months in April.
A train loaded with a 10-ton cargo emits 142 kilograms of carbon dioxide between Tokyo and Osaka, a fourth of that put out by comparable transportation by truck, according to data by Nippon Express Co.
Asahi Glass Co., Asia's largest glassmaker, added 2.2 percent to 1,336 yen. The company is in talks with automakers to raise prices on car windows by a 10th to pass on material and fuel costs, it said today, confirming an earlier report by the Nikkei newspaper.
Nippon Electric Glass Co. jumped 3.3 percent to 1,983 yen, while Central Glass Co. soared 5.4 percent to 429 yen.



European Stocks Rise, Led by Nokia, Barclays, Punch Taverns
European stocks rose as one of Nokia Oyj's biggest suppliers said mobile-phone demand is strengthening and European Central Bank President Jean-Claude Trichet said he hasn't signaled a series of interest-rate increases.
Nokia had its biggest gain since April after Jabil Circuit Inc. posted a six-fold surge in profit. Barclays Plc climbed the most in two months as the U.K. bank said it was selling shares to institutions in China, Qatar, Singapore and Japan. Daimler AG and Ryanair Holdings Plc led carmakers and airlines higher as crude oil slumped in New York.
National indexes rose in all 18 western European markets. The U.K.'s FTSE 100 gained 0.6 percent. France's CAC 40 added 1.4 percent, and Germany's DAX increased 1.3 percent.
Nokia, the world's biggest maker of mobile phones, climbed 6.7 percent to 16.78 euros. Jabil said revenue for the fourth quarter will be $3.2 billion to $3.3 billion and per-share profit excluding some items will be 29 cents to 33 cents. Analysts projected sales of $3.19 billion and profit before some items of 28 cents, on average.
Net income for the earlier period that ended May 31 rose to 19 cents a share from 3 cents a year earlier.
Barclays rose 6.5 percent to 331 pence. The U.K.'s fourth- largest bank by market value said it will raise about 4.5 billion pounds ($8.9 billion), selling shares to Qatar Investment Authority, Challenger, Temasek Holdings Pte, China Development Bank, Sumitomo Mitsui Financial Group Inc. and Barclays shareholders.
Bank stocks are the worst-performing industry in Europe this year as writedowns, credit losses and slowdown in the housing market erode earnings. Banks have raised about $305 billion to help cover losses since the collapse of the U.S. mortgage market. The Stoxx Banks Index closed yesterday at its cheapest in three months.
Royal Bank of Scotland Group Plc, the U.K.'s second-biggest bank, climbed 4.6 percent to 229.25 pence. UBS AG, the European bank with the most losses from the U.S. subprime collapse, gained 5 percent to 23.94 Swiss francs.
Daimler, the world's second-largest maker of luxury cars, added 1.5 percent to 42.48 euros. Ryanair, Europe's biggest low- cost carrier, gained 6.6 percent to 3.06 euros. Air France-KLM Group, the region's largest airline, increased 4 percent to 16.26 euros.
ABB Ltd., the world's largest builder of power networks, fell 2.6 percent to 30.18 Swiss francs after U.S. rival Rockwell Automation Inc. said full-year earnings will be less than its profit forecast.

U.S. stocks retreated to a three- month low after consumer confidence weakened and United Parcel Service Inc. said rising fuel costs will reduce profit.
UPS, the biggest package shipment company, tumbled the most in almost two years after predicting second-quarter earnings below analyst estimates. Dow Chemical Co., the largest U.S. chemical producer, slumped to the lowest since March as Deutsche Bank AG cut profit estimates. Prospects that the worsening outlook for the economy may forestall interest-rate increases helped financial shares rebound from the lowest level since 2003.
UPS lost $4, or 6 percent, to $62.26, an almost-five-year low. Earnings will be 83 cents to 88 cents a share, down from the range of 97 cents to $1.04 projected on April 23, the company said. The average estimate of 16 analysts surveyed by Bloomberg was 98 cents.
Raw-materials producers fell the most among 10 S&P 500 industries, losing 2.5 percent.
Dow slid $1.04, or 2.8 percent, to $36.58. David Begleiter, a New York-based analyst at Deutsche Bank, reduced his second- quarter and full-year earnings estimates for Dow because of rising costs and ``signs of demand destruction in the U.S.'' Dow said it will raise prices as much as 25 percent in July, the largest increase in company history and the second in two months, to recoup surging energy and raw-material costs.
Freeport-McMoRan Copper & Gold Inc., the world's second- largest producer of copper, fell as the metal retreated for a second day on concern slowing global growth will reduce demand. Freeport-McMoRan lost $2.83 to $115.72.


U.S. stocks rose, sending the Standard & Poor's 500 Index to its best gain in two weeks, after the Federal Reserve said risks to economic growth have diminished and gave no indication it will raise interest rates anytime soon.
Bank shares erased most of an earlier rally, limiting the market's jump, on the central bank's assessment that ``financial markets remain under considerable stress.'' Apple Inc., General Electric Co. and Wal-Mart Stores Inc. helped lead the advance as the Fed said the economy is still expanding. Jabil Circuit Inc., the maker of mobile phones for Nokia Oyj, climbed the most in six years after forecasting earnings that topped analysts' estimates.
The S&P 500 rebounded from a three-month low as 21 of 24 industries in the index advanced. The Fed left its benchmark lending rate at 2 percent, ending the most aggressive series of rate cuts in two decades, and said it expects inflation to moderate through next year.

The dollar declined against the euro before as Federal Reserve end its two-day meeting at which policy makers dacided to keep the target lending rate at the lowest level in more than three years.
The Federal Reserve's Monetary Policy Committee has decided to leave its Fund Rate unchanged at 2%, as widely expected, after their monthly monetary policy meeting.
The Fed affirms that easing of monetary policy plus measures to support market liquidity should promote economic growth. Downside risks to growth, although still present have diminished somewhat, while upside risks to inflation have increased, the Bank reaffirms its commitment to “monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability.”
The bank affirms that economic activity continues growing supported partially by resilient household spending, although labour markets have softened, and credit markets “remain under considerable stress.” The bank warns about tighter credit conditions, the weakness of the housing market, and higher energy prices. ``The Fed fall short of the most hawkish of expectations,'' said Nick Bennenbroek, head of currency research at Wells Fargo & Co. in New York. ``The dollar will come under a little bit of pressure.''
Inflation is expected to moderate later this year according to the Fed although, having in account the high energy prices uncertainty about inflation remains high.
New home sales fell to an annual pace of 512,000 in May, from a revised 525,000 the prior month, the Commerce Department reported today in Washington.
Orders for durable goods excluding transportation items dropped 0.9 percent in May after a revised 1.9 percent increase the prior month, the Commerce Department also said. The median forecast of 38 economists surveyed byBloomberg News was for a decrease of 1 percent.
``Due to the underlying growth concerns, it will be very difficult for the Fed to hike rates this year,'' said Matthew Strauss, a currency strategist atRBC Capital Markets in Toronto. ``That means the market has gotten a little bit ahead of itself pricing in rate increases, and the dollar will come under pressure.''