Japanese stocks dropped after Premier Wen Jiabao said indebted economies must “put their own houses in order,” damping speculation China would rescue Europe from a crisis that has sent global financial markets plunging.
Canon Inc., which depends on Europe for about a third of its sales, sank 4.1 percent.
Mitsubishi UFJ Financial Group Inc., Japan’s largest publicly traded lender, fell 1.8 percent.
Sharp Corp. climbed 3.3 percent after JPMorgan Chase & Co. raised the electronics maker’s investment rating to “neutral.”
The Nikkei 225 Stock Average slipped 1.1 percent to 8,518.57 at the 3 p.m. close in Tokyo, reversing earlier gains of as much as 0.6 percent after Wen’s comments today at the World Economic Forum in the Chinese city of Dalian.
The broader Topix slid 1.1 percent to 741.69.
Japanese stocks extended declines after Wen, facing calls to widen support for indebted European countries, signaled that developed nations should cut deficits and create jobs rather than relying on China to bail out the world economy.
Bridgestone Corp. rose 1 percent to 1,683 yen. The tiremaker said a U.S. unit will raise prices of radial tires for trucks and buses by as much as 8 percent on Sept. 12 because of increasing material costs.
European stocks rose for a second day amid speculation China may still buy the region’s government bonds even after Premier Wen Jiabao said indebted countries must not rely on bailouts.
Finmeccanica SpA (FNC) soared the most in 13 years on a report that Italy’s biggest arms company may sell railway units to General Electric Co.
Next Plc (NXT) rallied to a record as earnings increased.
Societe Generale SA slid 2.9 percent after Moody’s Investors Service downgraded the French bank’s credit rating.
European stocks almost erased their gains in afternoon trading as Austria delayed a parliamentary vote on an overhaul of the European bailout fund, causing confusion among investors. They later rebounded.
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a third day, as French President Nicolas Sarkozy and German Chancellor Angela Merkel said they are convinced Greece will remain in the euro zone.
All groups in the S&P 500 advanced.
Stocks also rallied on optimism that China may support Europe. China is willing to buy the bonds of nations hit by the debt crisis, Caijing reported on its website today, citing Zhang Xiaoqiang, a vice chairman of the National Development and Reform Commission.
Earlier today, equities slumped after inventories in the U.S. rose less than forecast in July, indicating companies are bracing for a slowdown in demand. Separate data showed that retail sales in the U.S. unexpectedly stagnated in August as a lack of employment and limited income growth restrained demand, highlighting the risk the economy will stall.
Company news:
General Electric Co. (GE), Home Depot Inc. (HD) and Monsanto Co. (MON) rose at least 2.4 percent, pacing gains in companies most-tied to economic growth.
Dell Inc. advanced 3.3 percent as the second-largest personal-computer maker approved an additional $5 billion for its stock repurchases.
Yahoo! Inc. climbed 2.1 percent to $14.55 as investor Third Point LLC ramped up pressure on the company’s board, saying it may add to its 5.2 percent stake.
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