Asia stocks fall as data takes shine off earnings

July 30, 2010 - 1:04am

Specialist Michael Sollitto, right, directs trades at his post on the floor of the New York Stock Exchange Wednesday, July 28, 2010. The Dow Jones industrial average fell almost 40 points after the Fed released its regional survey of the economy, a report known as the "beige book." (AP Photo/Richard Drew)

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TOKYO (AP) - Asian markets fell Friday, overlooking strong earnings from some of the region's biggest companies as Japanese shares tumbled on a strong yen and dour economic figures ahead of a key U.S. growth report.

Global electronics giant Samsung reported an 83 percent surge in quarterly profit as sales of panels for flat screen TVs and computer chips boomed. That followed a flood of earnings reports Thursday from Japanese consumer electronics companies and car makers, nearly of all which showed earnings recovering strongly as demand recovers from the global slump and deep cost cuts take effect.

But new figures from Japan offered a sobering reminder that the world's No. 2 economy remains fragile: The jobless rate rose, deflation deepened, and factories made fewer cars and mobile phones.

The Nikkei 225 stock average dropped 164.94 points, or 1.7 percent, to 9,531.44 as it headed for a second straight day of decline.

Strong profits at Sony Corp. and Nissan Motor Co. could not offset government figures showing industrial production fell an unexpected 1.5 percent in June from the previous month, while consumer prices fell for a 16th straight month.

Sentiment took a further hit as the dollar fell back under the 87-yen level. A strong yen, which reduces the value of profits brought back from overseas, is a major concern for Japanese exporters this year.

Investors are also cautious ahead of the second-quarter U.S. economic growth number due to be announced later Friday. Analysts expects the world's No. 1 economy expanded about 2.5 percent in the April-to-June quarter, down from 2.7 percent in the first quarter.

South Korea's Kospi declined 0.8 percent to 1,756.70 and the S&P/ASX 200 in Australia fell 0.7 percent to 4,490.60. China's Shanghai Composite Index was down 1.2 percent to 2,617.48 and benchmarks in Taiwan, Singapore, India and Indonesia also retreated. Markets in Malaysia, New Zealand and Vietnam rose.

In New York on Thursday, the Dow Jones industrial average ended down 0.3 percent to 10,467.16. The Dow has fallen 70 points over its last two session, but is still up 7.1 percent for July.

Several companies reported strong earnings, including Southwest Airlines Co., ExxonMobil Corp., but many in the market were put off by a jobs report showing many in the U.S. are still unemployed.

The Labor Department said initial claims for unemployment benefits dropped by a modest 11,000 to 457,000 last week, and investors were disappointed at the small drop.

The broader Standard & Poor's 500 index fell 4.60, or 0.4 percent, to 1,101.53, while the tech-heavy Nasdaq composite index fell 12.87, or 0.6 percent,to 2,251.69.

In currencies, the dollar fell to 86.38 yen from 86.72 yen late Thursday. The euro dropped slightly to $1.3069 from $1.3076.

Benchmark crude for September delivery was down 27 cents at $78.09 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.37 to settle at $78.36 on Thursday.